“Speaking of … ” PART 3 of 3

Transitions                                                                                                                           

 

In the Securities Industry, you will, as your skip your way along the yellow brick road, encounter a number of transitions which will impact your journey — rewarding or otherwise.  In this piece we’ll deal only with a transition involving a move from one firm to another.  Big, big topic requiring a boat load of serious thought before you pull the trigger.

For the sake of brevity as you mull over something new for 2021 let’s keep the consideration to a tight format: “why – what – where”.

 

The Why’s

 

• Your firm has put its interest ahead of you and your clients.
• Client relationships are in peril as the firm advances restrictive criteria to assets and revenues – up or out!
• The firm imposes poverty payouts on production of less than $500,000.00 which means it considers your value as sub-par.
• Proprietary product “offerings” are still a real factor at the “factory” versus the open architecture to be formed under more independent models.
• The technology offered by the firm is geared towards the masses and does not recognize the scalability of your business growth utilizing customized options.
• The firm does not have and does not offer the forward vision your business requires for the new market realities.

The What’s

 

• Will your clients follow?  What about the transition costs?  Is your relationship and track record with clients strong enough to ensure a successful transfer of 85% of the client base to the new firm?
• What, if any, legal restrictions are in your employee contract vis a vis contact with the client base post transition?
• What is the ease factor in moving the book and will the structure of the business (fee based, pm’d, transactional) affect the flexibility in the terms of transfer?
• Will the business model you seek fit in with the new firm and their operating philosophy?
• Will the demographics of the new market plan accommodate your cliental and importantly, your staff?

The Where’s

 

• What models are available out there for the advisor who wants more control of the business and more operational independence in the day-to-day running of the business?
• Would you and your clients consider:

 

– A highly ranked and independent IIROC Principal/Agent model (Manulife Securities or Raymond James)

 

-An Ontario Securities Commission regulated I.C.P.M. (National Bank Correspondent or Raymond James Correspondent)

 

-A more independently minded and flexible IIROC employee model (Canaccord Genuity, Investment Planning Counsel)

 

• There certainly more examples out there.  They range from small partners looking to expand their offering to portfolio managers looking to manage broker’s client assets while remaining in the business in a relationship mode.
• If you delve into the alternatives you’ve got to know that the support factors you need to run your business are there at the new firm and not simply in the planning stages.  You also need to know the new firm has a culture that will support the entrepreneurial practice and cede control of retirement and succession planning to the owner/advisor.
• And that the new firm is capable of being in the moment and able to adapt and maneuver in a changing industry.  Certainly onboarding of new clients is a critical must –have capability of the receiving firm.