Is Your Staff Interested in Your Independence?

There are plenty of good reasons for retail financial advisors (FAs) to consider the independent and semi-independent paths. There may not be as many reasons for their support staff (CAs) to look at such a move.

For the record, I am not a recruiter and I have no stake in whether anyone goes independent or remains in the wire house model that I loved for 25 years.

For FAs, going from being an employee at a wire house firm to being independent holds at least two significant attractions:

  1. Control – freedom from the interference of the firm (with its own corporate priorities) and freedom from the branch office (with its local personalities and real estate restraints)
  2. Higher Payout – it’s hard to get around the math on this one – if it works for you, it works for you!

If you are an FA looking at these two carrots, don’t lose sight of what such a move can mean to your support staff. Over the past two weeks I have had half a dozen talks with both FAs and CAs at 3 different wire houses who are mulling over this decision. Here is what CAs, even loyal, long-serving ones, are worrying about:

  1. No longer working for the big firm - The switch from being a W-2 employee of a major Wall Street firm to being one at a local “startup” is frightening. The relative lack of job security, probable loss of some benefits, and lack
  2. Loss of workplace community – No matter what you think, your CAs and other staffers have friends and other good relationships within the branch office. These people give them a needed break from you and your clients. You will shrink your staff’s world when you set up the new independent shop. Your staff knows that it will be just you and them – and they may not like that picture.

As a Branch Manager at a major wire house for more than half of my career, I have heard scores of CAs talk about their FA. Typical things on their minds:

“Tell (FA) that I only work 40 hours a week. He thinks that he owns me. He calls me on weekends, his clients call my cell whenever they want. He wants me to stay until 6:00 or 7:00 some nights.”

“She forgets to put in my bonuses on time, so I need you, as her manager, to remind her every quarter.”

“I and my FAs are like a family: it is way too personal sometimes because we know each other way too well. That’s why I actually like to cover reception for a few hours every week – they can’t bother me there. But don’t tell them that.”

This sort of thing goes on all the time, it is the stock and trade of your branch manager. Your CAs know it, and they know these conversations will end once your practice goes independent and you become their boss. They will lose the protective shield of the office, and it will matter.

So, what can you do as you consider making your move?

  • Assume nothing about your staff’s loyalty or comfort level in joining you.   Be prepared for at least some of them to say “No, thanks,” when you pose the idea of going independent.
  • Make sure that your CAs think through these issues. Show them the respect they deserve by bringing all of this up and talking through it.
  • Recruit them. Of course, you will need to pay them more. You may also need to set up a new understanding on hours and expectations. Set up a clear bonus structure – somehow related to the top line of the business – so that they get some understanding of the ups and downs of your revenues.

Communication and respect. Those are two things that your staff will likely say that they DO NOT always get from their wire house employer. Make sure that they will get them from you, boss!

Related: 3 Reasons to NOT Set Any Goals for Your Business in 2022