Headhunting is hot. In the US financial services industry, branch managers are under enormous pressure to recruit advisers from the competition. Advisers might be offered multiple times their previous year’s compensation to jump ship. Why do some advisers leave? And why do others choose to stay, building their career at one firm?
The case for leaving
Big advisers and teams choosing to change firms is headline news on industry websites. Many factors motivate advisers to leave:
1.The big payday: The successful adviser makes a good living, yet he sees the chance to get a few years’ income upfront as an opportunity too good to miss.
2. Free agent status: A branch manager likened managing star financial advisers to coaching a professional sports team. These advisers often have employment contracts. Once the contract is up, they start looking around for their next big payday.
3. Owning your own business: Going independent is popular in the US. Several networks help advisers provide back office support and help with the transition. Others allow advisers to affiliate and run an almost independent business under their umbrella. The adviser keeps lots more of the revenue.
4. “We are bankers now”: When the adviser’s firm is acquired by a bank, senior brokerage management is replaced by senior bankers. The adviser feels his new bosses do not value him.
5. The Roman galley: The adviser has built his career at a very structured firm which dictated that everyone did business the same way; all pulling on the oars together. The adviser succeeds, but does not like the culture, and decides to move elsewhere.
6. The new compensation plan: Behaviour is driven by how advisers are paid. The adviser is comfortable doing business in a certain way. Learning that he will be paid less under the new plan, and reluctant to focus on different products and services, he leaves.
7. Joining friends: Friendly advisers who used to sit near the adviser have taken the upfront money and left. The adviser leaves to join his friends and collect a big cheque too.
8. Toxic brand: The adviser’s firm is in the news for the wrong reasons. Clients want to jump ship, and the adviser is struggling to keep them. Questioning the integrity of his own firm, he is motivated to find another firm with a better brand.
9. Goodbye big client: The adviser’s largest client has suffered a fatal heart attack. He decides to go for that big payday while his numbers still look good.
10. The hiring manager left: The branch manager who hired the adviser and helped him build his career has left for another firm. The adviser follows.
11. Offices merge: The adviser is top dog in his office. Now his location is closing and the advisers are being absorbed in another office. Since he is moving anyway, the adviser decides he may as well change firms and make some money.
12. New office manager: The previous manager has been promoted. The adviser does not like the new manager, and decides it is time to leave.