Transition Money

Who’s offering it and should you take it?

In almost every conversation I have with advisors these days, the topic of transition assistance/up-front money comes up. How much is being offered? Who is offering it and what strings are attached to it? There is no question, more capital is being offered, to transitioning advisors, than ever before. With several large Independent Broker Dealers and RIAs being public or owned by a private equity firm, there are options for advisors that want a large amount money to move. That being said, there are still thousands of small and mid-sized firms that are in a completely different situation. A private firm, is typically looking at recruiting from a more traditional perspective. They are not recruiting an advisor to please shareholders or to boost their revenue in the hopes of selling for a larger multiple. For privately held firms that have no desire to sell, the question is how long are they willing to lose on an advisor before they break even. Most firms cannot or will not compete with the huge transition checks being offered by the large independent broker dealers or RIA’s. Instead, they will be focusing on the attributes that make them unique.

So, for advisors looking to make a change, here is how I suggest you approach your decision. Start the process being honest with yourself. Get clear on what isn’t working with your current firm. What are the most difficult pain points you deal with and what type of firm would solve for those issues? Also, come up with a list of deal breakers. This may be specific products, technology or a unique way of doing business. Once you are clear on the type of firm you should move to, then explore if transition money is offered at that type of firm. Too many advisors start the process with how much capital is being offered and waste time talking to firms that will never be a good fit for them. It’s important to remember that the long-term ease of doing business and alignment is what is going to take an advisors practice to the next level. Now, if your practice is compatible with a Broker Dealer or RIA that provides a large recruiting bonus and the fit is right, you may be able to capitalize on a very competitive recruiting environment where more is being offered than ever before!

Jodie Papike

Jodie Papike is the CEO & Managing Partner of Cross-Search, the first third-party, independent broker dealer advisor and executive placement firm. Since joining Cross-Search in 1997, Jodie has been consulting with financial advisors transitioning to new independent broker dealers, guiding them through the entire process of identifying their most appropriate options, negotiating a deal and transitioning clients. Jodie has an intricate knowledge of the securities industry and a deep understanding of each of the major independent broker dealer firms, enabling her to help advisors find and transition to a broker-dealer that best suits their needs. Cross Search has placed thousands of advisors, producing more than 375 mill. in gross dealer concessions. Jodie takes the utmost pride in finding a firm for an advisor that will not only better their career, but will also be a good home for them for years to come. Jodie is a frequent speaker at industry conferences, is regularly quoted and published in publications such as Investment News, Registered Rep, Financial Planning, Life Insurance Selling and Advisor One. Jodie earned a Bachelor of Arts degree from San Diego State, graduating with honors.

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