Changing jobs can be very stressful. And stress can lead to mistakes. This is especially true the further along you are in your career. You simply have more to lose the higher up you are on the earnings ladder. Consider that Harvard Business Review just published an article entitled, “Five Ways to Bungle a Job Change,” based on a look at C-suite executives. In fact, the major mistakes the authors identify for corporate executives could be taken right out of a do's and don'ts guide for wirehouse financial advisors.
Applying their research to our world, here are the top five don'ts for advisors looking to switch firms now:
Not doing enough research
Due diligence is one of the most important steps in the job search process. Advisors with a “short-term” mindset often end up jumping from the frying pan into the fire because they haven't taken the time to truly explore their options.
Before considering a move, you should ask yourself a number of basic questions. What frustrates me about my current firm? What do I like about my current firm? What do I hope to accomplish by a change in firms? What can the new firm provide my clients that my current one cannot? Am I going to be able to consistently expand my business at a new firm? Once you've answered these questions, go through your list of firms and research them with these questions in mind. Meet with the firms you are considering multiple times, speak with other advisors to get a sense of how they are viewed internally and externally, ask to do a home office visit to meet key product people and senior leadership.
Leaving for the big check
With the giant deals being offered, it can be tempting to move solely for the big upfront check. The temptation to replace lost revenues and assets from the downturn is a strong one. But leaving just for a big check is never the right move. Moving should always be about alleviating frustrations with your current position and finding a new position that will allow you to grow and advance your career.
Going “from” rather than “to”
Many financial advisors switch firms to escape their current position at any cost. This was behind much of the shuffling we saw last year. For instance, last year I worked with Dan and Tom, two Merrill Lynch advisors from Chicago. They were first quintile producers generating $1.9 million in revenues on almost $200 million under management. When the Bank of America buyout became public, they wanted out. I suggested they start the due diligence process and carefully explore all of the options available to them.
Contrary to this counsel, within a matter of weeks, they landed at UBS. Fast forward eight months and they've found that UBS has more than its share of problems. Unfortunately, their options are much more limited now because they don't want to risk moving their clients again. Furthermore, they're not even one year into a nine-year deal.
Overestimating your value
Ask any 10 advisors what they produce and they'll likely say something like, “Well, I was a $1 million producer.” Rarely do we hear actual production numbers, because advisors (like many other professionals) are struggling to come to terms with steep declines in revenues. Many former $1 million producers are now $750,000 producers.
When looking to change firms, it's essential that you be realistic and truthful with yourself, your recruiter and your potential employer. Deals are based on actual, current production. Enter the process with sensible expectations of your actual value to a new firm. If you don't, both you and the firm will only be disappointed.
Moving with a gun to your head
Changing firms because of internal or external pressures creates a sense of urgency. Maybe you have issues with management or colleagues that are compelling you to seek a job change. Maybe there is a client complaint that will be hitting your U-4, or an internal compliance issue that you're worried about. Regardless, the last thing that you want to happen is to be shown the door without a “Plan B.”
And your Plan B should answer this question: What is out there for you, and what options do you have if and when you have to move? Plot an exit strategy early and carefully, and you'll avoid making a bad situation worse. As the authors of the Harvard Business Review article note, the “occasional misstep can be forgiven,” but too many mistakes can “amount to a major setback.”
founded Chester, N.J.-based Diamond Consultants, which specializes in retail brokerage and banking recruiting. www.diamondrecruiter.com