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Breakaways Remodeled

Breakaways Remodeled

Your new remodeled firm will be much nicer than your old firm—and if you don’t design it correctly, you can always remodel again.

The final decision to change jobs is typically made when that final straw breaks the proverbial camel’s back. There is a lot of emotion involved in “I’m out of here!” and emotional decisions can be difficult to reverse. The good news is breakaway advisors can remodel their new firm once the emotional surge has receded if they start with a foundation that is flexible and doesn’t have any legal strings attached, similar to the Wall Street recruiting loan structures. Breakaway advisory firms initially start with a more than 90 percent payout, but over time they realize that they need to add some services to their dream firm. The three major items we have seen advisors add after a minimum six-month transition period will cost money but will enhance customer experience, foster growth and increase the value of your firm.


Technology (5-10 percent cost)

Your old firm had a technology infrastructure that is antiquated and too large to fully gut and rebuild. The way you had to organize your accounts to fit into this structure needs to be forgotten in your new firm. When you are building your new firm, you can use the latest technology to provide a superior user experience that clients don’t receive anywhere else. The technology solutions range in cost from 7 bps to 45 bps based on the complexity of the services provided. Basic performance reporting will cost 7 bps, and complex reporting supplemented with trading software can cost up to 45 bps. You can use the reporting provided by your custodians, but painting your new house with the colors you prefer will increase your curb appeal.


PR and Marketing (2-3 percent cost)

Your old firm’s marketing strategy focuses on creating and affirming their brand through TV, radio and print ads. It is very expensive, and it is all about them and their large target market, not you and your focused target market. Creating your new firm’s branding strategy is essential and requires the support of an experienced and knowledgeable firm like The Rudin Group or Blue Marlin Partners. These firms will work with you to define your message and help you promote that message using social media and traditional media. Both firms have contacts in traditional media and promote their own firms using social media.


Coach (1-2 percent cost)

Management at your old firm was primarily tasked with insuring that you operated your business within the regulatory framework and helping you grow using their products and services. Both of those mandates can create friction for an entrepreneurial spirit.

Adding a coach is like adding a new kitchen to your house. It will give you the most bang for your buck when you sell. You shouldn’t add this until your firm is established and you feel you have a solid understanding of the independent space. When you are ready, an experienced coach like John J. Bowen Jr. outlines what a coach should deliver:

  1. Stronger revenue growth (30 percent minimum)
  2. Deeper client loyalty
  3. Systematic process to identify and close ideal clients
  4. Fun

As the owner of the business you must empower and support the coach in implementing all of the changes they believe need to be made to help you win. You should let them call the plays and you and your team should execute them. 

Your new remodeled firm will be much nicer than your old firm—and if you don’t design it correctly, you can always remodel again. This flexibility feels great, and let’s be honest with ourselves, one of the personality traits that makes us great and that encouraged us to break away is that we are always looking for a better solution. One final warning: You are entering a new stage of your professional life. Make sure your new house doesn’t look like your parents’ house.



Jeff Spears is Founder and CEO of Sanctuary Wealth Services, champion of the independent advisor and author of the acclaimed blog, Wealth Consigliere. Follow Jeff on Twitter and Facebook.

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