Ten years ago, if I had asked a successful career counselor to explain their succession plan and sliding the path to retirement, they would probably have looked at me as if I had three heads.
“Why should I worry about that now that I have 15 years left?” “I’m losing it, growing up like crazy, and I’m just focused on how to serve my clients, develop my book and earn a fair salary,” they may have said.
Of course, it’s easy to lower your head and “ride the wave” when it’s good. But even without the catalysts of recent market turbulence, we have seen a significant shift in the mood and mindset of advisors in recent years.
In short, it is a shift from short-term thinking to a longer-term view of the world. I call it “counselor’s foresight” - a change in the counselor’s mentality from hyperfocusing here and now to long-term observation of their work.
Today, more and more counselors are asking themselves difficult (but critical) questions earlier in their careers.
Who will succeed me?
How will my job overcome me?
Will my company continue to be the best partner?
How can I protect and maximize the value of the business I have built?
This long-term view points to a more important fact about the mood of the counselor. Namely, counselors begin to think of their job as a job, and not just a source of income during their working years. Of equal importance, however, is what this means for the movement of advisors.
Advisors have changed companies to an almost record level in the last few years, and the momentum has continued this year as well. Many advisers understand that while the status quo may be good enough in the short term, it may not be good in the long term.
This certainly does not suggest that all advisors should or will take an immediate move. This simply means that counselors, at the very least, raise their heads and ask urgent questions. The answers to such questions often influence their decision to stay or leave.
Take, for example, a self-employed office counselor in the mid-40s, with average double-digit growth over the past three years. This advisor makes a great living, and while there are certainly things that frustrate them in their current firm, things are generally good enough. The said adviser obviously has no problem developing his book; the computer to take home is robust; and their clients are generally satisfied.
In the past, an advisor like this would never have considered a move. Why would? In the short term, there was nothing to deal with.
But in today’s environment, this same advisor is probably forced to face some difficult realities despite, or perhaps because of, their current success. And while they’re making a business book, they haven’t actually built a business — and will leave chips on the table without a long-term plan.
I am not suggesting that this advisor must take a step to address the above issues. They can very easily decide what is best for them to stay in place. In addition, their firm may be able to help them find a successor, while providing an opportunity to take advantage of retirement programs. And of course, staying in place is the path of least resistance and the least disruptive for both clients and advisors.
But most advisors, even those who feel well served in their current firm, are at least curious about their options.
For example, many firms have shown a real willingness to allow counselors to adjust their path to retirement (no matter how far away it is). Or the counselor may be able to relocate once and cash in twice by using the post-transition employment contract and then again through their new retirement firm’s program. And others may be able to find a natural buyer for a job in a new company. They may even be able to sell equity, thus removing chips from the table before retirement.
The new long-term mindset under which counselors work will become more entrenched, not less so. As the “retailer market” evolves and buyers are willing to pay the most dollars for wealth management practices, too much can simply be lost if you are complacent. While the status quo may be good enough for now, it may not be in the near future - and it is a good thing that advisers are refusing to ignore this reality.
Jason Diamond is vice president, senior consultant for Diamond Consultants — a nationally recognized recruitment and consulting firm based in Morristown, New York, which focuses on providing services to financial advisors, independent business owners and financial services firms.