Financial Advisors – Look Before You Leap
According to a recent survey, brokers and wealth managers will be on the move during the remainder of 2011 and in 2012. The survey, entitled “Wealth Management on the Move: The Moment of Truth” notes that there was a significant "buying" of advisors and wealth managers in 2008 and 2009 through retention packages. These usually took the form of forgivable loans with 3 – 4 year retention periods. This means the loans are now forgiven or close to it.
As a result, a lot of brokers are weighing new offers from new firms that include large signing bonuses:
A lot of top brokers will look at the signing bonus being offered, and at how little is left on the retention contract, and they’ll decide it looks like jumping ship is a good deal
Brokers need to be sensitive to the risk/reward calculus involved in any employment move. Things to consider include:
- The effect of any non-compete or non-solicitation agreement may have on their move to a new employer;
- The effect of any “garden leave policy” may have on their transition;
- Whether their new employer is in a position to aggressively help them move their business;
- The tax implication any bonus or promissory note may have on them individually;
- How much business might be lost; and
- The general hassles of moving to a new employer.
The grass is always greener on the other side of the fence. Any employee should critically evaluate the pro’s and con’s of a move and consult with counsel if necessary.