In my 35 years as an executive recruiter, I’ve seen many advisors make solid career decisions that set them up for future success. But then there were advisors who made some astounding mistakes. Here are a few that stand out.
The Boaster
Once, the head of a team boasted to the branch manager at a prospective firm that he got his previous branch manager fired. That’s how important he was. Surprise! No deal. From that moment on the branch manager at the hiring firm feigned interest while covertly sabotaging the deal. I guess there’s a difference between healthy self confidence and grandiosity.
Didn’t sweat the details
Several years ago, an older “stock jockey,” an upbeat jokester who’d always practiced solo, was cajoled by his wirehouse branch manager to join a high-producing team. He was enticed by a small boost to his payout and some extra dollars for T&E. Sure enough, his new partners lost no time in trying to get to know his transactional clients and in trying to convert them to a fee-based format. They even designated another team member to acquire his book. The advisor, now well into his 80s, ditched the team and joined a regional firm. There, he continues to happily grow his business. He really needed to have a frank discussion and a written agreement with his prospective partners on his time frame for maintaining his business model and his plans for retirement.
Mr. Overconfident
Then there was the advisor who took his eye off the ball at the worst possible moment. He had changed independent broker-dealers and yet was strangely complacent about ensuring the success of his move. He often expressed great confidence that his client relationships were rock solid and, for reasons that I could never fathom, just couldn’t be bothered to get his clients excited about his move and to make sure they submitted the transfer paperwork in a timely fashion. By the time he got around to focusing on the transfer process, he’d lost many more assets than he had ever expected.
The Stonewaller
One particularly egregious case of poor judgment in this regard involved a long-tenured advisor at a major wirehouse who was terminated by his firm. When it happened, he’d already been interviewing with a prospective firm that was well suited to his niche and which was convinced that he was a worthy hire. When asked by the prospective firm’s compliance department for a detailed explanation of the circumstances of his termination, he took the advice of a celebrity attorney and stonewalled them. The firm quickly shut down discussions and passed on him as a candidate. Had he been more forthright, he probably would have been hired.
The Hamlets
Due diligence is one thing, but when this type of advisor is planning a move they investigate, they discuss, they review. And then, when they get a good offer, they delay.
It doesn’t usually end well.
Once, I was working with an advisor whose book of business was commission-based. A firm made him a nice offer. He delayed and delayed. By the time he was ready to accept, the firm had decided it was no longer hiring heavily transactional brokers.
And then there was a team that was suddenly slapped with customer complaints — unfairly as it turns out — while they were making up their minds. But the damage was done and the deals were off the table until those issues were resolved. In some cases, it took more than a year for these cases to conclude.
Other advisors got offers in strong stock markets, a time when clients are more typically happy. Some of those advisors dillydallied and found themselves jumping ship in whipsawing or down markets. Their clients were then not nearly as loyal, hurting the value of their deals.
The moral of the story: If you’ve decided to move and the situation is right, don’t alienate your prospective manager — Just do it!
