Why Successful Advisors are Exiting the Business
We gladly welcome back one of our most valued contributors, Dan Richards, who had taken a brief leave from writing while he pursued other interests. Look for Dan’s articles on a regular basis.
There is a group of advisors at the top of their game, scaling up practices, attracting clients and expanding their teams.
And then there is everyone else.Over the past 30 years, I’ve spent time with financial advisors at every level. I thought I’d seen and heard it all, but recently I’ve encountered something new. Some top producing advisors have told me that for the first time in their careers they find themselves struggling to maintain revenue, as older clients who are drawing down accounts or who pass away aren’t being replaced. As one advisor put it, “I’m working as hard as ever and doing the things that have worked in the past, but am just not seeing the same results.”
In other cases, successful advisors are exiting the business entirely, selling their books well before they’d planned to. Here’s what one advisor said: “I’m in the fortunate position where I don’t have to work if I don’t want to … and I never thought I’d say this, but I no longer want to. I still enjoy helping clients but regulatory scrutiny, the level of competition and the overall business environment has made this business such a grind, it’s just not fun anymore.”
“A Roadmap to Move Forward”
"Dan's talk created a sense of urgency about the paradigm shift in our industry and gave our advisors a roadmap to bridge the gap and move forward."
- Frank Laferriere, SVP and COO, Portland Investment Counsel
Looking for a keynote speaker to shake things up at your next conference?
Dan Richards delivers talks that challenge the status quo and inspire action. But he does more than issue a call to change … he provides new thinking and fresh strategies to help advisors navigate the future.
“You got the top marks of any speaker at our Presidents Club conference … great job”
- Scott Yeoman, Training Manager, RBC Dain Rauscher
Today, veteran advisors fall into two categories. The first category is advisors with momentum, who are seeing growth in their client bases and are moving forward. The second category is advisors whose business is flat or shrinking. There is not much between those two categories – more and more advisors are either growing and moving forward, or they are falling behind.
When I talk to advisors whose businesses are growing, I am struck by the extent to which they’ve changed and adapted the way they work. It’s not just that the things that made you successful in the past won’t lead to success in future. More alarming for many advisors, continuing to do the things that you’ve done to this point is a guaranteed prescription for failure.
To understand why some advisors are struggling, you need to take a step back. When I speak at conferences, I sometimes start by asking advisors in the audience to identify once dominant companies that are struggling or have vanished entirely. No one has difficulty answering that question.
There’s a long list of industry pioneers and one-time market leaders like Kodak and Polaroid, Xerox and Yahoo, TWA and Pan Am.
The U.S. big three auto makers are also in this category. While these firms have bounced back from their near-death experiences in 2009, their share of the market today is a shadow of the past. GM’s share of the US auto market has been cut in half from 45% in 1980, to less than 20% today. Globally, the top three auto manufacturers today are Toyota, Renault-Nissan and Volkswagen.
And then there’s the long list of storied names from retailing – firms like A&P, Blockbusters, Bonwit Teller, FAO Schwartz, Kresge, Marshall Fields, Montgomery Ward, Radio Shack, Toys R Us and Woolworths … not to mention the Shakespearean tragedy that is Sears.
The reason for these dramatic shifts comes down to two words: accelerated change.
Throughout history, change has been a constant, but the pace of change has not. There have been very long periods of slow, almost imperceptible change. For example, in 1800 Napoleon’s troops travelled using the same technology and at roughly the same speed as Julius Caesar’s armies in 50 BC. Then 50 years later, the arrival of railroads transformed how armies travel forever.