Displaying items by tag: advisors

Many advisors are questioning whether now is the right time to switch firms, especially amid market volatility. While uncertainty can make timing feel risky, waiting for the "perfect" moment is often a losing strategy.

 Market turbulence can actually create opportunities, as clients seek reassurance and may be more open to discussions about better solutions. The key factor in a move isn't timing but whether a new firm offers better resources, technology, and support for clients. 

Working with a transition consultant can ease the process by handling logistics and securing offers discreetly. 

Finsum: Ultimately, the decision to move should be driven by the right opportunity, not market conditions.

The advisor landscape is shifting, with over 9,000 advisors changing firms in 2023, particularly within the RIA sector. Many advisors employed by RIAs—often non-owners earning a percentage of revenue or salary—are seeking greater autonomy, ownership opportunities, and better compensation. 

The rise of large RIA aggregators and increasing M&A activity have contributed to advisor dissatisfaction, as firms focus on efficiency and growth at the expense of individual autonomy. 

Advisors looking to transition have several paths, including joining another RIA, moving to a wirehouse or bank, launching their own firm, or affiliating with an independent broker-dealer. Each option balances control, compensation, and operational complexity, making careful planning essential for a successful transition. 

Finsum: As the RIA industry consolidates, firms must innovate their advisor value propositions to retain talent and remain competitive.

Switching broker-dealers is a complex process, but with the right approach, it can be a transformative step for an advisor’s business.

• Legal considerations should be the first priority, as non-compete clauses and client ownership agreements can create hurdles if not addressed properly. 
• Developing a detailed transition plan at least 90 days in advance is essential, ensuring advisors understand which accounts can move, which will remain, and how client data can be organized legally. 
• Engaging staff early in the process prevents last-minute chaos and helps distribute responsibilities effectively. 
• Advisors should also consider client communication strategies, ensuring a seamless transition that reassures clients and maintains trust. 

Finsum: Ultimately, a well-executed move can enhance an advisor’s ability to serve clients while positioning their practice for long-term growth.

Advisors evaluating a new firm should ask key questions to determine if it aligns with their long-term goals and client needs. 

1. First, understanding who owns the firm reveals its revenue structure, potential proprietary product requirements, and overall objectivity. 
2. Second, clarifying who owns the book of business is crucial, as it impacts client retention and succession planning in the event of a departure. 
3. Third, identifying the firm’s clearing firm or custodian helps advisors assess whether transitioning will be smooth or require significant operational changes. 

Staying with a familiar platform can simplify the move, while switching may present challenges.

Finsum: By addressing these questions upfront, advisors can make informed decisions about their professional future.

The debate over custodial pricing continues, with many questioning whether bundling all revenue sources into a single fee is fair. Since custodians don’t face significantly higher costs for a $10 million account versus a $100,000 one, a pay-for-services-used model may be more equitable. 

Another pressing issue is the slow adoption of automated onboarding, as many custodians still require paper forms and wet signatures despite available digital alternatives. Some speculate that firms hesitate to streamline transfers because it would make it easier for advisors to switch custodians, reducing client stickiness. 

Beyond pricing and onboarding, factors like service quality, cost, and additional features—such as dedicated support teams or integrated technology—shape custodian selection. 

Finsum: As the industry evolves, understanding these priorities will be key to creating a more efficient and competitive custodial marketplace.