Financial advisors who wonder where they sit in the industry landscape and what their next professional step should be have a new tool designed to bring them some clarity.
Mindy Diamond, founder and CEO of Diamond Consultants in Morristown, N.J., and one of the top recruiters in the advisor industry, yesterday published "Should I Stay or Should I Go?" as an advisor’s manual for assessing career options.
One of the key services Diamond Consultants offers, Diamond says, is helping advisors see themselves clearly in relation to the overall market—where they understand current trends, uncover their value and identify all their options.
Her 145-page manual, which includes testimonials from prominent industry figures such as Barry Sommers, Ron Carson, Erin Botsford and Rich Steinmeier, walks advisors through the processes they encounter when considering a big career move: self-evaluations, goal-setting, reality checks, due diligence, and financial negotiations. Her strategies are directed at advisors who may be considering various destinations, whether it be a wirehouse, full independence or something in between. It also can help advisors decide whether they should do nothing at all, she says.
Diamond sat down with Financial Advisor and discussed her approach.
Why did you think this book was needed?
I thought there was a real gap in the information-sphere, if you will, available to financial advisors. I find in my work with financial advisors that they know what they know, but they don't know what they don't know and they don't know the right questions to ask. At some point they start to get a little curious about what’s next, or they start to get a little frustrated or bothered by things going at their own firm. And, naturally, they'll begin to take calls from a lot of external recruiters, or from managers at other firms, and they start taking meetings. Before they know it, they've had a bunch of meetings, but they don't really have a sense of clarity around their own goals and what they're really looking for.
And so the book is a roadmap for how to assess your current firm and the status quo. Does it serve you best? How does it stack up against your own goals? And what does the rest of the landscape look like? What are your options elsewhere? It’s not meant in any way to be a sales pitch to move. Not at all. It's to help people assess the status quo. And I suspect that most people who read it won't move.
So it's something they can use to understand the process and shelve until they’re ready to make a move?
It's absolutely, "Now I understand the process, and when and if I'm ready, I can pick it up, and it can walk me through it." But it's much more than that.
I wrote the book largely with an audience of people in mind who are just successful financial advisors. They’re happy, have no intention of moving, but want to understand how they think about their business as a business, how they can prioritize what they need, how they get clarity around their goals, and how they can ensure that those goals are best being met by the status quo—by their firm, by the way they're running the business, whatever it is.
Can you give an example of a situation where that would be the case?
Let's start first of all with an independent advisor, an advisor who owns their own firm, who manages, say, $400 million and is happy being independent. This person owns their own firm, has total autonomy and control and freedom, but is beginning to realize that there's a ceiling on their growth, they're lacking capacity. They know that they will need to make significant investments in technology and infrastructure in order to succeed. They’re at a crossroads.
The book can help give that person clarity around what are the options. Do I do nothing? Do I think about merging with another firm? Do I think about selling to a private equity firm or a larger RIA firm? Do I recruit another advisor to deal with capacity? Do I invest my own money in what needs to be done? And it helps that person to really think, how important is it to do those things? Anybody would say, "Sure, I want to grow more." But on a scale of one to 10, how important is it? How much must I do it in order to live my best business life? And that's what it gives people clarity on.
A second example would be an advisor who works for a major brokerage firm. And that advisor begins to acknowledge, as they all do, that things are not perfect. They're certainly good enough. I'm making a great living. I'm growing like crazy. My clients love me. I'm able to coach my son's basketball game, basketball team, rather, at the end of the week. And it's good enough.
But I notice that there's more bureaucracy than before, that I have less freedom and control than I did before, or than I would like. I begin to notice that my clients are moving upstream, meaning becoming more high-net-worth, and want and demand access to private investments and concierge services and things that I can't get access to where I am. I can't market myself or brand myself the way I want to.
I’m not unhappy. It's more than good enough. But I read this book not because it motivates me to move, but to get clear on what my goals are and what I'm willing to do about it—meaning how much hassle am I willing to put myself through in order to achieve those goals, and what, if anything, could be better elsewhere. Not everybody's going to be willing to move. Not everybody's willing to do anything about it, nor should they. But the notion that there could be something better, the possibility of something better or bigger can’t—and shouldn’t—be ignored.
Data shows that there's stiff competition for talent and therefore it’s a good time for an advisor to make a move. What about when the economic environment changes?
In 2008 and 2009, when the world was falling apart with the Great Recession, we had our best recruitment year ever. More financial advisors moved in 2009 than any other year before that. Why? Because there will always be significant transition incentives, financial incentives, for advisors to move. It doesn't change, even in a recession. And no matter what's going on, whether it's recessionary times or boom times, financial advisors as fiduciaries for their clients have a real responsibility to always make sure that they are in the right place.
They don't have the luxury of just saying, "It isn’t great, but it's good enough." Because good enough doesn't necessarily mean they're doing best for their clients. The idea of clarity around your goals, clarity around what the options look, what the industry landscape or the waterfall of possibilities look like, and clarity around what you're willing to do about it is always relevant, no matter what's going on in the world.