13. Upgrade: Banks, boutiques, regionals and wirehouses all have reputational positions in the pecking order. Investment banks and private bankers top the list. Moving means moving up the ladder.
14. Following the team: The key advisers on a team have changed firms. The remaining advisers see a better future if they keep the team together.
15. Debt problems: Some advisers are bad at money management. One such assumes the good years will last, until business takes a downturn and he is in serious debt. He needs a big payday.
Why do advisers stay at one firm?
On the other hand, many advisers ignore the tempting call of upfront money and sit tight, for one or more of the following reasons:
1. Loyalty: The adviser joined the industry from another career. The firm trained him and helped him build a successful career. He is happy to stay.
2. Golden handcuffs: Many firms feel they must encourage advisers to stay. In addition to regular compensation, the adviser earns bonuses held in suspension for several years. If he were to leave, this money would stay with his former firm.
3. Team structure: The competing firm might hire the adviser, but might not take his entire team. The adviser is sure the remaining team members would aggressively compete to keep the assets at the old firm.
4. Selling the book: The adviser’s firm allows him to sell his book and get a payout when the time is right.
5. Good culture: The adviser likes doing business a certain way. Either his chosen firm has the same culture or it is happy to leave him alone.
6. Prestige image: The adviser’s firm has a great reputation and plenty of brand awareness. People feel they are taking a step up doing business with this firm, which helps the adviser close business.
7. Giving back: Some successful advisers like teaching. They receive additional compensation to run training programmes for new advisers.
8. Broken promises: The adviser’s competitor’s contract spells out the big things, but not everything. There are verbal promises about soft items require a degree of faith, but as it is often said: “If it is not spelled out in the contract then it is not part of the deal.” The adviser distrusts the other firm.
9. Management track: Getting additional compensation to handle some sales manager duties, the adviser sees himself as a future branch manager, not a career adviser.
10. Succession planning: The adviser plans to bring in his children and gradually move the business over to them.
11. Money is not everything: A big payday would be nice, but taxes will take a big bite. The adviser has an easy commute, allowing him to spend more time with his family. He places a higher value on time than money.