How Firm Culture Impacts Advisor Breakaway Decisions

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As we settle into the realities of a post-Protocol world, many advisors feel as if they no longer have control over the trajectory of their careers. As Janney’s head of recruiting, I have heard from advisors that they feel overburdened, and in many cases, feel their current firms have lost their cultural integrity. In an attempt to quantify these feelings into more specific and usable data, I took a formal anonymous poll of the financial advisors who moved to Janney over the last year.

While many outside the industry saw the Protocol as a “Get out of Jail Free” card for advisors perceived to be chasing a recruiting bonus from multiple firms, in truth it opened a path for advisors to truly consider their best home, prioritize client care, and move to the firm that best supports their business model and client relationships. It allowed an open, transparent marketplace to flourish, where clients were the eventual winners, as advisors moved their trusted relationships to the platforms that best served the advisor and client needs. With somewhat less flexibility in switching firms today, it is more important than ever for an advisor to assess a firm’s culture to ensure it aligns with theirs.

As I interviewed financial advisors that had joined Janney over the last year and asked them about the factors that influenced their decision to move, their responses fell into one of eight categories. The majority of categories included reasons that were specific to the firm they left, but three categories were consistent among almost all of the advisors’ responses. They were all about culture. This is particularly enlightening because many large firms have eschewed culture altogether, relegating it to history’s dustbin as just plain incompatible with running a wealth management firm today.

These three financial advisor cultural priorities should be kept in mind by any advisor thinking of moving or refreshing their business model. Regardless of if you choose to stay at your current firm, or if you decide to continue your legacy elsewhere, it’s important to consider how your firm approaches and delivers on the following.

  1. Management Support: Financial advisors may be responsible for running their businesses, but their ability to thrive is dependent upon the direct support they receive from home office leadership and local branch management. Access to senior management at headquarters means advisors can gain valuable insight from experienced sources and provide direct feedback to decision makers. A corporate culture that promotes open dialogue and the exchange of ideas can completely alter the work experience and ultimate success for all parties for the better. Even more important, however, is the relationship that advisors have with their immediate branch manager. A branch manager’s role as an advocate, business coach, and trusted partner in client service is indispensable to the growth of an individual practice.
  2. Entrepreneurial Environment:At times, it can be difficult to strike the right balance between supporting advisors and giving guidance on how to operate and manage their practices. This can be especially true for firms that reach a certain size, and are forced to consider advisors as a group, rather than individually. However, just as every client has their own set of needs, so does every advisor have a unique approach to their trade.  It is imperative that advisors feel empowered to run their business how they see fit, instead of worrying about adhering to guidelines that don’t prioritize client interests.
  3. Respect for the Advisor-Client Relationship:Speaking of clients, they rank as the paramount consideration when staying where you are or moving your practice. Clients find themselves at one firm of another because of the trust they put in their advisor. It’s essential that the firm you are with recognizes the sanctity of the advisor-client relationship. Advisors should never be made to feel like they have to compromise between the interests of the firm and the interests of their clients, or that their role is nothing more than a conduit of revenue. As an advisor, your commitment and responsibility are to your clients and your firm should feel the same way.

In many aspects, a firm’s culture is out of an advisor’s — or even current management’s — control.  Elements such as firm size, history of the firm, and ownership structure, none of which are easy to change, are cultural elements that can serve as indicators of future strength or how an advisor may be treated when they seek support and assistance. What we learned from listening to those advisors who joined Janney last year was that three other cultural components — management support, entrepreneurial environment, and respect for the advisor-client relationship — are controllable and in a firm’s best interest to focus time and resources. In the end, the firms who pay the most attention to these areas will be the winners in that they will recruit and retain the best advisors who will then see their client relationships flourish.

 

As Director of Recruiting and Business Development for Janney, Jeff’s focus is to hire the industry’s best financial advisors and provide all of Janney’s advisors access to its proprietary practice management solutions. Jeff brings over 25 years of experience in the financial services industry to Janney. He joined the firm in the fall of 2012. Jeff can be reached by phone at 215.665.6548 or by email at jsmith@janney.com.

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