As I wrote in my previous article, Chapter One, “We Were Stockbrokers”, the financial services industry has, is and will always be one of rapid change. Technology, the geopolitical landscape, regulation, deregulation and the economy, to name a few factors, will constantly have the business in a state of transition.  One aspect of this constant state of flux is the not so new but much more frequent occurrence of firm transactions. Companies get bought out, go private, go public, etc.  Who benefits? The primary stakeholders, that’s for sure.  I have no problem with that at all; none, zero.


Quick metaphor: I had a boss who was a really great leader, and despite our differences in style, I truly respected and learned a lot from him.  He had this saying: “the world is full of doughnut makers and doughnut eaters, which one are you?”  Businesses are built on the efforts of the doughnut makers and are often left out of getting to eat some of them.  Are you following me on this?

From a business continuity perspective, aka advisor retention, stakeholders who are the primary recipients of huge payouts from these transactions should include the people who generated the revenue that created the opportunity for these transactions. Feed your eagles and they will never leave the nest.


Now back to the 5 things every advisor needs to think about when contemplating going solo:


1. Why are you making this decision?

Mad at your boss? Bad reason.  Don’t like the new company? Bad reason. Don’t like your new title? Bad reason. No benefit to your clients? Good reason.  Downgrade in services, product offering or support from the home office? Good reason. No beneficial change to compensation? Well… ok, good reason.  In other words, make a sound business decision, not a short-sighted emotional decision.


2. Do your research.

Not all independent firms are alike. And not all compensation packages are either.

What can you get from an independent RIA and at what cost? A 95% payout sounds great until you find out you are paying the freight for platform charges, ticket charges, office space, tech support, administrative support and compliance support.  95% becomes 35% pretty fast.  Find a company that fits your economic, administrative, back-office, technology and product needs, with an easy client transition process.  Everything is negotiable and I mean EVERYTHING. “Ask and ye shall receive.” And do yourself a favor and take your time. It should take at least 3 months to find the right firm for you and then another 2-3 months transitioning over.


3. Get legal counsel on your current employment agreement.

This should really be Number 2 but this is a negotiable cost item when talking to an independent firm.  Along with the usual trade secrets and use of information caveats, know your boundaries. I’m not a lawyer (but I played one on TV), so this should not be construed as legal advice:  Somewhere in your employment agreement you will find a huge section on handling client information, non-solicitation of clients and fellow employees and so on.  That language can mean different things in different jurisdictions (and states-California employment contract law is really unique) but ultimately, you are bound by that contract. Get legal advice on what you can and cannot do and follow that advice to the letter.


4. Choose the right firm and prepare to leave.

This goes with Number 2 as well. Transitioning to a new firm is an emotional and sometimes nerve-wracking experience even though it’s the right thing for you and your clients. Make sure your new firm does as much of the heavy lifting as possible. And don’t forget to put 3 months of income needs aside, even if your new alliance is fronting you some money.  Better safe than sorry.


5. Make like a library and book.

Strategically plan the best date for your resignation and move. Yes, resign in writing, preferably early on a Saturday morning. Yes, Saturday morning is a great day of the week to settle in.  You know, set up your coffee machine and put your awards on your credenza.  Stuff like that, but again, that’s just my opinion. That will give you a head start before the market opens on Monday.  Good luck and enjoy!


David Roberson

CEO and Founder

Over fourteen years in technology, marketing, and branding for Financial Services.