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Making big decisions with a team

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Aug 23, 2008 3:51 am

H&R Block Financial Advisors is being acquired by Ameriprise.  The deal closes Dec approx.  We are being forced onto the P1 employee platform - no other choice.

  I'm part of a team that I consider a textbook example of a team that should go indy.  My team partner seems reluctant to explore the opportunity.  It appears to be fear that clients won't follow.  However, we've both received numerous unsolicited comments from clients (in response to the acquisition news) saying they do business with our TEAM, and they don't care who the firm is.    (That kind of client feedback has REALLY made me realize I'm getting poor value for money on my 40ish% payout grid.)   He appears happy to take the retention check and stay "comfortable" going with the flow, vs. taking advantage of this significant opportunity to thoroughly examine going indy.   Anyone else here ever have similar issues?  All opinions encouraged, and appreciated.
Aug 23, 2008 2:14 pm

Use some of your financial skills and do a multi year cash flow projection based on two scenarios: going independent, or going to another b/d.  It will almost invariable show you will make more money in the first year or two - however long the new b/d provides any upfront money or enhanced payouts - and then once those go away you would make more independent.  It helps clearly illustrate that you make more money in the long run going independent, but to get that you have to have the discipline to turn down offers that will pay you more in the short run. 

It’s much like teaser rates on credit cards - great in the beginning and then … not so great.  Help him see exactly how much money he is really leaving on the table long term by not going independent.  Sure you will have to pay all your expenses, but you’re paying those expenses currently - you’re just not having them itemized, nor do you have any real say in what you are buying.  Kind of like internal fund expenses.  The question is: can you cover all likely expenses from the dollars that 60% or so (whatever applies for you) that your b/d currently takes out, and have money left over - money that goes to your pockets?

Then ask this question: pretend it’s time to retire.  What is the value of your book as part of the new b/d?  What is the value if you were independent?  Which allows you the most flexibility to structure a deal that maximizes money in your pockets?

If the financials don’t do much to sway him, ask him exactly what his real concern is.  Often times it is lack of understanding about this path - fear of the unknown.  Most reps are so accustomed to having everything done for them, and unquestioningly giving up the majority of their gross for the deal, that they can’t envision anything else but the well worn path.  They don’t even realize the incredibly rich platforms available that often equal or surpass those they are accustomed to.

Independence is not for everyone.  It may not be right for your partner.  But you can aim to get him to understand the potential benefits and realize there are viable options available if he can expand his mindset.

Aug 24, 2008 2:40 pm


  Well put. Aside from the numbers, one should also consider the freedom and flexibility of products available to service client needs when choosing a new b/d. I don't know if the P1 platform is as flexible as the P2. The fact that they are "forcing" the P1 does not pass the smell test IMO.