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Please Don't Go

For brokers and branch managers, the process of switching broker/dealers inevitably involved bad blood

For brokers and branch managers, the process of switching broker/dealers inevitably involved bad blood: Once you announced your decision to leave, security soon arrived, ushering you to the door. Your book of clients would quickly be divvied up and dished out to other brokers in the office.

But in today's intense recruiting environment, some firms are having a change of heart. Now, when a top-quality advisor says he plans to leave, management will often conjure a counteroffer — something that used to be unheard of.

Certainly getting a counteroffer is better than being abruptly shown the door. But is it enough to make switching firms seem like more hassle than it's worth? Advisors should measure the merits of the counteroffer carefully against the costs and benefits of making the leap to another firm. First, ask yourself: What were your reasons for wanting to jump ship in the first place? Can these things be remedied, and can you be sure the counteroffer will stick? Here are some additional questions you should ask your manager and yourself when a counteroffer is made:

  • If the firm is offering additional compensation or bonus, will the increase take you off of the list for a year-end or future increase?

  • If the firm is offering to pay for additional sales support, are there any production requirements that you must meet in order to retain this additional support?

  • If the firm is promising additional referrals, travel or entertainment funding, what specific programs will the firm implement to make these things happen?

  • If the firm is promising greater access to certain products or money managers, how long will that take to implement?

  • If one of your reasons for leaving the firm is its culture, is there any indication that this is going to change?

Finally, you should request that any and all promises be put in writing before you turn down an offer from another firm. You need to protect yourself in case the manager reneges once he's sure you're staying on, or in case he tries to push you out later once new recruits (possibly already in the pipeline) are in place and productive.

Ultimately, the problem with sticking around is that unless your reasons for wanting to leave were purely monetary, they probably won't go away with a counteroffer. “Conditions are just made a bit more tolerable in the short term because of promises made to you,” says Paul Hawkinson, publisher of The Fordyce Letter, a monthly newsletter for the executive search profession. “Will you have to solicit an offer and threaten to quit every time you deserve better working conditions?”

Case in Point

Take the case of Martha. After five years with her wirehouse, she was ready to make a switch. Martha was producing $400,000 in revenues a year, but she didn't feel like she had enough sales support and was dissatisfied with the culture of her firm — particularly the lack of flexibility concerning what products she could sell. Having secured a new position at a new firm, she resigned on a Friday afternoon. But as soon as her manager heard the news, he spent an hour trying to persuade her to stay, promising to address her concerns and make the necessary changes. At first, Martha felt torn, but then she realized that no matter how many promises her old manager made, the culture issue was not going to change.

Martha left for the new firm the following Monday morning and has not looked back. She managed to bring all of her client assets with her — $40 million. Nine months later, she is much happier and her book has already grown 10 percent.

Of course, Martha is just one case. But when you are thinking about changing firms be prepared for efforts by management to encourage you to stay put. If you have a long-term trusting relationship with your current firm, perhaps staying will be the best move for you. But, be sure to ask the right questions so that you can make a well-informed decision. Don't let your emotions get the best of you. It may be that your first instinct to make a move should be honored.

Writer's BIO: Mindy Diamond founded Chester, N.J.-based Diamond Consultants, which specializes in retail brokerage and banking recruiting

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