The process of deciding to change firms often hinges on concrete comparisons — of compensation, of working conditions, of relations with management.
But other, less tangible factors come into play as well. Here are four questions that get to the heart of both types of criteria. Any rep considering changing firms should answer these before taking any major action.
What criteria should matter most in the decision to stay?
Moving is not always the answer, but exploration is never out of line. The real issue is what kind of setting will enable you do your best work and grow your practice the fastest. If your current firm offers growth potential by assisting you to create a team or to buy a retiring broker's book, and if your branch manager offers the mentoring and administrative support you need, then the right decision might be to stay put and take full advantage of the support the firm provides. Moving is not a cure-all, but statistics show that brokers who change firms almost always expand their book of business. A broker who is not happy with the way his book is growing needs to identify what is keeping him from doing so. If something at the current firm is the root cause, then a change is probably the right move.
In any case, it does not hurt to explore options and do some due diligence on other firms. If nothing else, such an exercise might help you realize your current firm is actually a pretty good place.
How do I pick the right firm?
If you are looking for a huge payday and feel you need a top brand name, you should consider a wirehouse. Choosing independence is a big step and works if you have an entrepreneurial spirit and are tired of the heavy handedness at the major firms. If your primary objective is to increase your assets under management, a bank brokerage provides a built-in referral source. If you are looking for a more entrepreneurial environment and to get higher payouts than at your wirehouse, you should perhaps explore a regional firm. The options available to brokers today are so different from what they were five years ago that anyone who has not looked around recently owes it to himself to do so.
What numbers do I need to be attractive to a new firm?
Often, moving can create one or all of the following circumstances: a better quality of life for you, more autonomy, higher payouts and reliable referral sources. But many brokers believe they must have $1 million in production to be attractive to a new firm or to negotiate a good transition package. It's true that brokers with larger production numbers are the most attractive, but any rep who starts looking around simply because he's crossed some sort of production milestone is probably making a mistake. The decision to move should be based mainly on a desire to grow your business further.
Am I too close to retirement to change firms?
If you have been with a firm for 30 years and think retirement is your next step, you have two options: stay and get your gold watch, or look into the very real option of cashing out twice. A new firm might offer a “sunset plan,” which allows you to receive a handsome transition package for your book of business and help you negotiate and team with brokers who will buy your book when you retire.
If you are avoiding exploring opportunities with other firms because of concerns about confidentiality or of wasting a manager's time, worry not. A branch manager from a wirehouse told me recently, “Recruiting is the single most important thing I do, and I am happy to meet with brokers as often as possible because my job is to move someone from curious to interested.”
You will never know what can happen to your career until you investigate and ask questions.
Writer's BIO: Mindy Diamond founded Chester, N.J.-based Diamond Consultants, which specializes in retail brokerage and banking recruiting (www.diamondrecruiter.com).