Wirehouse advisors who saw the new year free them from their 8/9 year forgivable loans no doubt found the turning of the calendar pages to 2019 especially poignant. Release from the forgivable loan deals presents a whole new wave of opportunity and freedom as it allows those same advisors to search for the best firm options to the benefit of both themselves and their clients.
Advisors coming off the forgivable loan deal should make it their New Year’s resolution to assess their business practices and confirm that their existing firm is in alignment with their goals and vision. Of course, such an evaluation includes the classic questions of what are my options and where do I want to be with my career, finances, and lifestyle. However, the more important considerations during this evaluation are whether the existing firm has a structure to support the advisor as they grow their practice, provides them with a solid strategy to monetize their book, and offers the framework for them to best service their clients.
No matter what answers are arrived at, it is vital for the wirehouse advisor to understand that there is no limit when it comes to their vision for their business. The scope of transition opportunities available today is vast and includes everything from going to another wirehouse to joining a regional, national full-service, independent broker-dealer, or RIA platform. In essence, for the wirehouse advisor, the world is yours as the range of firm styles and choices has become as dynamic as the financial services industry itself. You owe it to both yourself and your clients to evaluate where the strongest prospects lie in 2019 and beyond.
One of the more interesting options recently to take hold for transitioning wirehouse advisors is the regional firm business model. The last five years has seen a definitive uptick in the viability of the firms, as regionals such as Raymond James, RBC, and Stifel have had significant recruiting success. The reason is simple – a regional firm offers the best of both worlds to advisors who have come up through – and our comfortable with – the wirehouse model.
In essence, regional firms are a throw back offering and solution to those wirehouse advisors (and quite frankly all advisors) craving the camaraderie of yesteryear’s robust product and solution offering combined with high touch service, direct access to management, and being part of a smaller group of advisors – in most cases generally less than 2000 advisors. By making a baby step away from the behemoth “manage to the lowest common denominator” mindset of wirehouse firms, an advisor loses nothing while gaining everything by not being treated like a number.
Regionals are now offer extremely attractive transition assistance packages on par with those available at the wirehouses. This is an attractive options for advisors who welcome the security of W-2 status when leveraged alongside the additional benefits of a fully-supported office environment, including local operations and sales support, health and retirement benefits, succession planning, and the ability to rely on a regional brand image.
When transitioning from a wirehouse to a regional, an advisor should see very little disruption in their business model as the regional advisor will be able to offer capital markets and trading expertise, investment banking, syndicate, financial planning, various investment services, and even technology that although not perfect, is sufficient for their needs. And so the regional baby step is uniquely beneficial to the advisor in that it offers a win-win-win through better culture, monetization of the book of business, and the most sought-after on the transitioning wirehouse advisor’s wish list – more love from the executive suite.
Whichever direction you choose for your practice, it is vital that you do choose and that you do not let your career be carried along by the tide caused by your comfort with your existing firm. The potential upsides of a transition are too great in todays financial services climate to not be seriously considered. In the end, just imagine where such a transition could take you. The prospects are limitless when you consider them.