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Mindy Diamond on Independence: Financial Advisor Economics Beyond Transition

In an active recruiting environment, advisors are eager to understand where deals are at and where they’re headed. Beyond a transition deal, how can advisors monetize their business over time—thinking about the short-, mid- and long-term—whether they are in an employee or independent model?

When discussing advisor movement, there’s one question that’s often top of mind:

What kind of deal did the advisor who moved get?

Certainly, it’s no secret that in the competitive recruiting world that, advisors often receive a transition deal when joining another firm. It’s most common for traditional W-2 models to offer lucrative and aggressive financial incentives—often north of 300% of trailing 12-month revenue—to switch jerseys. In comparison, independent models offer less, if any, monetary incentive for those moving into the space.

But, beyond a transition deal, plenty of advisors wonder how they can monetize their business over time – thinking about the short-, mid- and long-term – whether they are in an employee or independent model.

In this episode, Louis and Jason break it all down, including:

  • Where recruiting deals are at—and what the differences are in transition deals at traditional firms vs. independent models.
  • The motivations around a move—and how monetization plays a part in the decision-making process.
  • Long- and short-term goals—and how the value of an upfront deal differs from the long-term potential of business ownership.
  • The economics over the short-, mid-, and long-term—and how each is impacted based on the model an advisor selects.
  • Selling an advisory business—and what advisors need to know to maximize enterprise value.
  • Retire-in-place programs—and how these monetization events compare to opting for a recruiting deal from another firm or going independent.

There’s no doubt that advisors have a wide variety of choices when considering the next phase of their careers. Whether they are looking to monetize in the short term or playing the long game, there are plenty of options to consider.

It’s an episode for any advisor looking to better understand the economics of the wealth management industry, the impact of a recruiting deal and other monetization events they may encounter throughout their business life.

Download a transcript of this episode…

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