Broker Check

When Your Financial Advisor Leaves

April 30, 2024

I've been a financial advisor for the past ten+ years, all with the same company. Until August 2023...

Making the decision to leave my former company and start my own financial planning firm was not an easy one. I'm a single dad, and I had a pretty good income that was relatively stable and had been increasing well over the past few years. I knew that striking out on my own, creating my own financial planning firm, would be a HUGE risk for my family and future.

So why did I do it? And most importantly, how does the decision affect my former clients?

My clients are extremely important to me, and I consider many of them to be good friends. So let's start with them.

I believe that people tend to stay with their financial advisor for two reasons:

  1. They receive value from the relationship

  2. Inertia

Many people maintain their advisor for years or decades without being intentionally involved in their finances. The rest (a minority, unfortunately) have an active role in planning for their financial futures, and genuinely like their financial advisor for a myriad of reasons.

And yet, when their financial advisor leaves the company they worked for (for whatever reason), most clients don't understand that they face an important choice to make:

  1. Stay with the same company and restart the relationship with a new advisor

  2. Move their accounts/assets to a different company and a new advisor, or...

  3. Follow their former advisor to a new company.

I believe it's at this crucial juncture that many "active" clients turn into "passive" clients.

Maybe they don't KNOW that they can follow their old advisor if they want. Or that they can use this opportunity to "shop around" for a new advisor that might fit them better. Or that, if they like the company they're with but don't like their new advisor, they can usually ask for a new one at the same company.

What most clients seem to do is...nothing. They accept the status quo, perhaps with a newly-assigned advisor that will be retiring soon, or that doesn't possess the education or credentials that the client is looking for, or that perhaps has conflicting personality traits.

So, choosing to leave my company, and thus my clients, wasn't a decision I took lightly. As an independent contractor who didn't "own" my client base, I'd be starting from scratch. And I'd be leaving my clients to make a difficult choice about how to continue their relationship with an advisor.

After considering my move for about a year, I decided that it would be best for me AND my clients if I left to create my own "independent-supported" firm, i.e. a firm that I could run the way I want to, where I could serve my clients the best way possible, while still having the support and guidance of a much larger company.

I would have choices regarding CRM and financial planning software, how to book my meetings (online!), the level of support and service I could offer, access to more investment products/options, and so much more.

I would have much more control and flexibility, more choices and options available to serve my clients in ways they might not have been helped before, in way that they maybe didn't even know existed. And I'm a firm believer that more choice is ALWAYS better than the alternative.

And finally, I could build a legacy; a brand and a business that I could grow as large as I want, or keep it very small. A legacy that I could pass down to my heirs one day, or transition to another younger advisor of my choosing in the future.

Making the move to being an independent financial advisor was a gut-wrenching decision. And though it might be too early to tell, my gut tells me that it was a fantastic decision, for me AND my clients!