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When I talk to an advisor who is unhappy with their current broker dealer firm but scared to make a change, I understand why. Here’s how I chose the wrong firm and what I would have done differently. There’s a powerful lesson in it for advisors who are making the same decision.
A naïve and poorly made decision
As a highly animated three-year old, I had a talent for telling imaginative stories. Being a writer was my true destiny in life. Although I spent over a decade in finance, it was not what I was meant to be.
But that doesn’t take away the fact that my decision to go with the wrong firm was the absolute number one factor that crushed my career as a financial advisor.
Looking back, I approached the decision the same way that many advisors do: the numbers looked good on paper. They were going to pay me a salary while I built up my business and then, after the clients started rolling in, the salary disappears and I get a (highly appealing) payout.
I was welcomed in by one of the directors who seemed competent, experienced, warm and committed to my success. She asked me about my family and even wrote their names down. I was impressed.
Sound familiar?
It all seemed rosy. And then…
Things fell apart
There came a point when it all collapsed. I had a baby and needed more support than I originally negotiated. I wished I had gotten every single detail about the offer in writing. But at the time it seemed like minutiae. I couldn’t take maternity leave. There was a paycheck blip and I put in time for which I didn’t get paid. Where was all this money they had promised me?
At the same time I was in a sales nightmare. They had claimed to support my plan to use social media to gain new clients. But we never translated that into what it meant. There was such an arduous process to get one blog approved and the volumes in my queue irritated the compliance officer. They didn’t believe in digital marketing because it wasn’t how most of their advisors got new clients, or how they had done it when they were in the business.
My greatest selling strength was shut down.
To make it worse, now that my transition was coming to a close, the “free trial” of their technology systems was ending. I was going to be footing the bill for technology that I found annoying and hard to use.
The social pressure was killing me. I had repapered a few clients from my old practice and had gained many new ones from my calling efforts. But I was letting everyone down. We weren’t even done with the transition and I was leaving. What was going to happen to them? How was I going to tell them? I didn’t have the heart to ask them to follow me to wherever I was going next. It was humiliating.
I almost had a nervous breakdown.
At night, I laid awake playing a game of mental ping pong. One day I decided I couldn’t take it anymore and abandoned what I had fought so hard to build.
What was missing
Here are some things I would have done differently if I were an advisor in the same position:
- I didn’t evaluate enough options. I seriously looked at two other firms. I should have evaluated at least five.
- I didn’t consider a variety of firm types. All my options were the same. I should have looked at ones that had different marketing, cultures, products, etc.
- Instead of placing such a heavy weight on their financial offering, I would have adopted a concrete framework that evaluated the fit based upon tangible factors such as size, compliance, marketing, technology and leadership.
- I made the decision about the firm’s leadership emotionally without asking myself if the way they succeeded in the business was the way I wanted to build mine.
- I didn’t test the waters with my clients and the kind of people I would have wanted to be my clients. If I could have gone back I would have asked a handful of them what they would have thought of being a client of the organization I was joining.
- I would have gotten a vision of the type of technology I wanted to use and what it would cost. Could I afford it or did I need the company to bring attractive discounts due to their scaled relationships with these vendors?
- I wish I had gotten every single detail of the financial package they offered me in writing before I started - for legal reasons and also because it would have clarified expectations upfront.
When I look back, it’s clear: I set myself up for failure by doing a lousy job picking a firm. My biggest mistake was seeing the decision in one dimension instead of looking at it as a search for a multifaceted ecosystem, a nurturing environment where many different elements coexist, a place where I could naturally grow into what I wanted to be.
Sara’s upshot
If you’ve been thinking about the decision to change your broker dealer, we’ll go more into depth about the five factors that matter most in a webinar with Kestra Financial on August 8t. Please click here to join.
Sara Grillo, CFA, is a marketing consultant who helps investment management, financial planning, and RIA firms fight the tendency to barf meaningless cliché on their prospects and bore them as a result. Prior to launching her own firm, she was a financial advisor and worked at Lehman Brothers.
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