Advisor Mindset Shifts for Transitioning from a Broker Dealer

Today’s Wednesday wisdom, I was inspired to record it because I talk to and work with many advisors who are either thinking about making a change in their business or leaving their broker-dealer or usually an insurance broker-dealer to go independent or RIA or they’re already in the process of doing that, and I often get asked the question, what can I expect when this happens? And I think the answer to that question is so critically important, regardless of whether you’re transitioning from your firm to go independent or not and so I’m speaking today to certainly advisors who are leaving to go RIA or advisors who are simply watching their business evolve and realizing that they too have to evolve as a business owner themselves.

So there’s the obvious stuff.

There’s obviously technology and being able to benefit from all the advancements in the fintech space. Of course, there’s that element. You know, the different perspective around marketing and compliance and having a different relationship with the folks who actually help you create content and create a marketing presence, of course that stuff’s gonna be different as well if you’re independent and being able to charge fees the way you want and offer the services that you want, yes, that too. What’s more interesting to me and what I think advisors should spend more time exploring and preparing for are the mindset shifts that need to take place and that will naturally take place when you do go out on your own, and so I want to talk a little bit about that today.

I always say I’m gonna try to keep it under 10 minutes. I think I will.

So the first one is the way in which you actually define what it is you’re building. I talk about this a lot on these videos. I think we’ve done a disservice, to some extent, in the industry at some firms by telling advisors like you have to get to the billion and you have to build gen two on your team and make yourself less relevant to the business and if you don’t build an ensemble, you’re not doing it the right way, and the truth is none of that is true. Of course, if you are looking to take a step back from making the decisions and being the primary revenue generator and you really want the business and the brand to continue long after you’re gone, of course you have to do those things, but there’s absolutely nothing wrong with building a lifestyle practice, a boutique practice where you get to work one-on-one with just the types of clients that you like to work with and cap the number of clients you bring in in any given year. There’s absolutely nothing wrong with doing that, and now in 2020, 2021, there are so many platforms and firms that really will enable you to be the owner and the primary advisor, but not have to worry about building something that’s so supremely bigger than yourself.

Of course, if you want to do that, you certainly can do that and there are places you can go that will help support you in doing that, but there’s nothing wrong with building a lifestyle practice is the point of this spiel, and so really taking time to define and sometimes redefine what it is that you want the business to do, not just for your clients but for you, important to have that discussion with yourself.

The second thing is how you define success.  Keep in mind, folks, that so many of the metrics and systems and structures that we’ve grown so accustomed to building our business around have been manufactured within the broker-dealer, meaning ending the production year in May, having to hit certain quota or certain sales of certain products or service lines in order to hit a certain counsel level. When you leave the broker-dealer world, none of that stuff exists anymore.

Thinking about success of the business in terms of number of lives, let’s say, that you’re impacting or premium or new assets. You don’t have to follow or ever track again any of that stuff. Well, the new assets, maybe, yes, that one, but all the other stuff like am I getting business done by May 30th? All of that stuff goes away, and so taking time to really redefine success metrics and what success looks like for you in a given week, a given month, and a given year in the organization, that is totally up to you to decide, and there’s a fine line, right, between being a little bit more lax about how we define success and making sure we’re running a profitable business, but you don’t have to feel that pressure of am I not gonna get to go on this trip or am I not gonna get recognized within the organization because I haven’t sold enough of this? It all goes away, and what I’ve heard and anecdotally what I know from people who have gone through that transition, 100s of people I know who have gone through that transition, it’s an immediate weight off your shoulders. The challenge is sometimes because we lean so much on the firm to define success for us, we actually don’t know how to define success for ourselves and our business. So having that conversation with yourself and a coach and your partner is really important.

The third shift, and this ties to the second one, is this idea of how we structure our calendars and activity. The biggest change, I think, and transition for advisors when they’re independent is this idea that you need to have 25 meetings on your calendar every week just so that you are considered to have had a productive week. Like that is complete nonsense, and in fact, I would argue the less, the better so that you have space and time in a week to think and create and strategically plan and meet with higher margin people. So the way in which you think about actually leveraging your most precious resource, your time, that has to change as well.

Only within the insurance BD channel do we see advisors having review meetings, tons and tons of review meetings every single week, and recycling people from the C and D client segment and having them come in to meet with you just so you can have somebody to talk to and meet with and potentially try to cross-sell something to. We only see that in the insurance BD world. We also only see it in assistant or an admin on the team, what I could consider to be wasting time at the beginning of the month trying to figure out, gosh, the advisors are having a light week. Who can we get in here to meet with? All of that goes away when you’re out on your own. In other words, the most critical shift you could start making is thinking about the fact that the review meeting, the time that you likely, where you spend likely most of your time, the review meeting is a staple of your service.

It’s the foundation of really the relationship with the client. So your review meeting should be set and pre-scheduled before the year even starts, meaning if you’re having a review meeting with a client today, the next review meeting you should be having with them is either six months or one year out, and that should get scheduled at the end of the meeting that you’re currently having with them. That’s not to say that you can’t interact with them and call them and speak to them throughout the year, but the comprehensive review that takes your time to prep for and your team’s time, that’s pre-scheduled and predetermined. The only thing that your team should be doing between the review meetings or before a review meeting is engaging with the client, sending them an agenda, getting them updated paperwork, not calling them to try to get them to come in, and so when you start thinking differently about how you’re spending your time actually servicing and engaging with clients, you’ll find that not only do you have more time on your calendar, the client’s having a better experience, but this pressure of trying to keep seed client review meetings on the calendar just so you have someone to be in front of in a week, that completely goes away, and it’s a really freeing mindset shift.

Okay, so those were the three. How you define what it is you’re building, how you define success, and how you actually work through your activity and your calendar.

I hope that was helpful for you. Of course, feel free to send in your comments and thoughts.

Related: How to Listen to People You Vehemently Disagree With