Deal Breaker: Home Office Visits
Unknown: that’s where a deal is is made or broken that’s where you get the feeling of a culture of an organization that’s where you’re looking the people in the eye and asking questions and getting to know the people that you’re going to be working with every single day for the rest of your time at that firm this is potentially a multi-million dollar asset that you have here and I’ve I’ve seen more light bulbs go off positively or negatively than than anywhere else
Podcast Opening + Introductions
Corey: hey everyone thank you so much for joining the podcast today uh this is Corey whan managing partner of bridgemark strategies and lucky enough to have Jeff Nash the the CEO and co-founder of bridgemark strategies on as well
Corey: me and Jeff combined have probably helped over a thousand financial advisors do their due diligence take a look at the marketplace and help them find the firm that’s best for them and over that time we’ve seen probably every mistake possible that’s out there including one of my financial advisers three week before their transition they had their attorney had the same name as their branch manager and they sent their draft of their resignation letter uh to their branch manager instead of to their attorney so that’s definitely something that you don’t want to do as a mistake
Corey: but me and Jeff just wanted to talk about some of the mistakes that we see happen over and over again uh to make sure that you learn from them as you’re going through your due Dil your due diligence process uh and make sure that you’re just making the best decision possible when you’re looking around
Corey: Jeff thank you so much for your time and hopping on today
Unknown: thanks Corey thanks I don’t know that I heard that story that’s a great story
Jeff’s Story: UPS Driver Mistake
Unknown: you know one of my funnier stories also and and I’ve been doing this for 25 years now I go back to 1999 where I’ve been doing this uh was an adviser was leaving it was actually Edward Jones that he was leaving had a new office set up and the UPS driver knew knew that he had a new office set up U but knew that he wasn’t in the office and literally it was a smaller town and delivered a whole giant package to his Edward Jones office uh just because he knew he wasn’t in the right look where he was gonna be uh of course his boa found out everything kind of fell apart and he got termed right away he made a great living though he he had a huge amount of success he was pretty set to go but it was just a UPS driver that tipped the scales for him as well
Unknown: so you it’s always about trying to make the smart decisions is clearly what we try to help people with it’s but there are some interesting stories that we’ve seen over our years I’m sure
Mistake: Choosing a Firm Based on Recruiter Likeability
Corey: yeah as as I said we’ve we’ve probably seen everything out there in the industry the first thing that I see a lot is financial advisers making a decision off of the the likability of a recruiter or a branch manager they go through this process and they make really good friends and close relationships to either you know one of those two do and because of that they start ignoring some of the potential red alarms out there and maybe reasons why they shouldn’t join a firm and they wind up making a decision purely on likability from a recruiting standpoint
Corey: and it makes sense a lot of people make a decision off and they do business with people they like but in my opinion as you’re going through the due diligence process make sure that you like the right people make sure that you like instead of the recruiter or the branch manager that might not even be there the whole length of your your note or a recruiter is pretty much gone right after you join a firm make sure that you like the service people the leadership of the firm the people that you’re going to be working with every single day of your life over the length of time at your firm and and maybe not those recruiters
Corey: you have anything to add Jeff
Feel, Fit, and Financials
Unknown: you know yeah I do uh there’s an expression that that you know I came up with few years back and then actually I used it so often I went out and trademarked it and that expression was feel fit in financials and and what I found from just again helping scores hundreds of advisers over the years is they’re not exactly sure how to evaluate and how to compare firms uh and so when we think about feel feel is about culture it’s about alignment it’s about philosophical it’s about goals uh it’s also about likeability and we always say likeability table Stakes you got to like the people you’re working with it’s just you can’t make your decision on likability and you can’t exclude the other factors that can be even more important than than just likeability to your point right
Unknown: you may not be working with these folks much longer than than just the recruiting process you may not be working with these folks even if in the branch manager World branch managers move around a lot and and while it’s really important to interview and understand and like that branch manager they move solely joining a firm based on the branch manager without understanding what what could be how business is being processed right it’s really about your clients that you want to prioritize in that decision-making process and what’s going to be important to the client uh from a a product from a suitability from a business process from a technology there are all these tools and resources that all too often I think advisers take for granted and and so likeability absolutely table Stakes uh I I would almost never make a decision based on likeability alone you know but you definitely to I do agree you got to like the people you’re working with that’s an important component to the decision process for sure
Don’t Dismiss a Firm Because You Don’t Like the Recruiter
Corey: and on the on the other side I would say a lot of times financial advisors will potentially pass on a really quality firm maybe because there isn’t likeability with a recruiter and they find it a little hard to do business with that person and they wind up they might wind up missing out on a really good opportunity just focusing on likability of the wrong people
Unknown: yeah it’s a it’s a great great analogy as well right it’s a great example as you talk about that there have been many occasions where I’ve I’ve curated firms for advisors and that first call just doesn’t go well and so often when that first call doesn’t go well the advisor just completely ruled it out even though that’s literally a recruiter representing the firm that they may never have interaction with again it just quickly gets discounted you know and and a lot of times as a consultant we have to work backwards to help them understand no no this firm is checking all the boxes that you’ve so that you’ve told us to look for you know so it’s you have to unwind that that initial conversation and that that lack of likability in the recruiter uh in that process
Unknown: yeah it’s it’s a likeability is clearly important I stay by that both the favorable and the UNF the unfavorable um but it’s all in this in the evaluation process when you’re looking at changing firms because advisers I think don’t do it often enough and they’re not exactly what are the things to look for it’s way overemphasized just the likeability of a single person
Mistake: Picking Based on Upfront Economics
Corey: absolutely absolutely you know the the second one I would probably say is the most common mistake it’s just financial advisors making decisions off of upfront economics sometimes they have a really hard time differentiating you know the pros and cons on when a financial adviser is doing this by their s and they’ll just pick the firm with the largest you know upfront economics
Corey: I’m working with the team right now they found a firm that nailed everything from a feel from a fit from a financial standpoint and they were 99% going in that direction and then all of a sudden another firm came out of left field that is giving them an extra $100,000 of upfront transition assistance and all of a sudden they’re St starting to rethink their process and while $100,000 seems like a lot of money over a 10-year time period you know after you take out taxes you’re looking at maybe 60 Grand over a 10-year time period so you’re potentially once you take a look at the numbers you’re potentially making yourself go to a subpar firm for $6,000 per year in after tax money
Bigger Checks Can Mask Deficiencies
Unknown: you know I’ve seen that as well frequently and I’ve seen it with with not just six figures of $100,000 difference but seven figures of million dollar differences um and and multi-million dollar differences
Unknown: and I would stand by the the comment that what I’ve experien from a lot of advisers over the years is those advisors that focus on just The Upfront economics first and only look at that you know there are those advisers that really I would say need that money and that becomes an important part of the decision-making process
Unknown: but I think realistically what happens is is firms that lack feel that they’re not properly aligned and most importantly they lack fit where their business and the way they process and handle business is not properly aligned in what the adviser needs they’re going to try to mask that with bigger checks and and I think that’s what happens is the advisers then get tempted with the bigger check and say I can make this work and the reality is is you shouldn’t be trying to make things work just because it’s a bigger check you end up losing in the long run and we’ve seen countless advisers lose clients through this you could almost set your watch to it where it’s three years later where we see advisers really unhappy that they’ve taken that upfront check which is then a 10-year note uh and they’re literally trying to figure out how to unwind that how to pay it back can they get another note from somebody else to offset it uh meanwhile it’s really hurt their business
Unknown: you know so for you and I what we see every day is is is those upfront economics it’s the easiest thing for an adviser to compare like a is number one and then The Upfront economics is number two without taking full consideration into what are the ongoing economics uh you know what are the what are the the succession economics even right when you have a business that has a value what is the value of that business at one firm versus another firm
Unknown: and so there’s a lot more you know of a of a broader discussion around economics than just upfront but the one thing I would caution and the one the biggest mistake I see people make it really is about looking at upfront economics as a replacement for or as a as a offset to something that can’t be done and that’s really where you get into the big mistakes of don’t just settle for The Upfront economics use economics as a negotiating toy Ploy right use it as a tactic when you negotiate and it’s okay to then use one firm against another firm as you kind of looking at two firms that you really like trying to differentiate between the two and having an economic discussion to kind of to use that differentiation
Unknown: but I’d say you know really be careful with what The Upfront economics can be and firms that will give you more money to offset what would be deficiencies
Money Is Emotional
Corey: yeah I mean I I think a big thing to consider Jeff is that money is very emotional I mean I went through it myself in a past career before I was an independent consultant but I was looking at job offers and a firm gave me money that I just couldn’t refuse
Corey: I mean I was thinking about how I could potentially you know pay for my kids college education or pay off my house or go on like these amazing vacations with my family and while I was thinking about all of those things I wasn’t focusing on some of the Red Alarm some of the cultural fits some of the things like I wouldn’t be able to do that allowed me to be successful in my own job and I think that’s a big thing that we do in the process c as well is just help take emotions out of the decision um and help financial advisers focus on what’s really really important so they don’t make an emotional mistake
Consultant as Sounding Board
Unknown: yeah I I think there’s no question I would even take it a step further it’s a sounding board right a financial adviser often has their spouse to talk with about this on the emotional front but a lot of times the spouses aren’t involved in the business and so it’s it’s hard to talk to them about the business decisions that are also connected to the emotional decisions and that sounding board of just comparing and contrasting and being being in their corner is something that I’ve enjoyed about what we do is really helping them and being able to really make a difference to really let them share their thoughts as well as us kind of offsetting what their thoughts are with with highlighting pros and cons in their their decision-making process
Unknown: you know and that’s when you can really have that conversation with somebody about economics and the emotional ties to the economics versus what are you offsetting with that right what is what are you giving up or what are you gaining and and those are really important conversations to have and advisers really need to have those conversations right
Unknown: that’s ultimately when you change firms you’re looking to make a change for the better you want to improve something and whether it’s your technology your tools your service your compliance your products whatever it is you’re just your entrepreneurialism your Independence you’re looking to go from from one place to the next and not go backwards no one’s looking to go backwards and having that evaluation and having a resource to actually talk through you know when you think about when you change firms your best source of information is the recruiter representing that firm your second best source of information is a friend who either may be at that firm or a whaler and none of them really are looking out for your interests and it’s really where a consultant can come in with an agnostic approach to really help you kind of compare and contrast and really think through the pros and cons of that decision-making
Mistake: Blindly Following a Friend
Corey: yeah I mean and that and that was the that was the third thing that I I I wanted to talk about I think this happens a lot more when financial advisors are doing this on their own and exploring firms but maybe they have a friend that they greatly respect that was at their previous firm that made a move to another firm and they’re a raving fan and whether it’s because they trust and respect that financial advisor or they’re trying to save time and disruption in their business they kindly blindly follow that financial advisor you know over to the other firm
Corey: but I’ve talked about this in other videos before you know everyone has different wants needs and goals I mean think about how many times a friend has told you man you need to go see this movie or man you have to go to this great restaurant and you wind up going to either and you’re like that wasn’t really that good it’s because everyone’s opinions of different things are different that’s pretty low stakes when you’re you know spending $50 to go to the movies or a couple hundred dollars to potentially go to dinner but with a multi-million dollar asset like your business you know it makes it makes sense to make sure that you are really exploring if that firm is not just a good fit for your friend but it’s a really good fit for you and your clients as well and spending that extra time you know
Corey: I’ve had some of my best referrals and this is not meant to be self-serving at all even though it may come across that way but I’ve had some of my best referrals coming from million dollar producers that I’ve helped move and instead of them referring their friends to go to their firm they’ve referred them to me and occasionally they end up going to that same firm but frequently and even the referr says hey I’d love for this person to be over here there are synergies there are things we can do together but I want them to go through the same process that I went through to really evaluate and more often than not uh as it’s just the way it happens they don’t go to the same firm you know and it’s because of they have different interests and it really comes down to priorities
Priorities + Scoring Firms
Unknown: you know when you evaluate a firm there’s there’s you know everyone can say there’s a top 10 list there’s probably 50 different things on that top 10 list when you’re evaluating a firm and and if you then wait those 50 different things and said okay I only want to focus on the things that are 10 out of 10 now you may have 10 things that are a 10 out of 10 of importance out of those 50 items and the other piece to that is there’s not a single firm including the incum that’s going to have a you know what would be a perfect score a 10 score on those 10 different items so it’s really a complicated kind of formula when you think about how do you decide what’s important for somebody versus someone else and how does The Firm support that
Unknown: well and that’s some of the kind of the process and the work that we do is to really help advisers understand where firms are strong where they may not be as strong as it relates to what becomes important to them in their priorities
Mistake: Cutting Corners During Due Diligence
Corey: 100% 100% the next mistake that I see happen a lot I don’t think financial advisers understand the actual time investment that it takes to go through due diligence when you’re exploring you know three to to five different firms there’s you know lunch meetings or WebEx meetings there’s technology demos there’s economic phone calls you’re doing webex’s to explore all the as aspects of that broker dealer that are really important to your business
Corey: and a part of the way through the process you see financial advisers just kind of trying to cut corners and not just and not digging in deep enough with questions that are really really important to their business whether it’s financial planning or reporting or marketing or compliance whatever it is
Corey: I was on a call with a financial adviser in a broker dealer a couple months ago social media was really really important to this adviser he wanted to take his business to the next level from a grow standpoint through social media and he basically asked one question about social media do you have the same social media capabilities as all the other firms the recruiter said yes and he was just about to move on right to the next right to the next portion of the business and we took a step back and asked literally 12 different questions about what they could do from a social media standpoint how long is the approval process can they do video can they do LinkedIn YouTube whatever it is we we we we did like 12 different questions and it wound up being that you know that firm wasn’t a really really it wasn’t a good fit but um I think a lot of financial advisers get fatigued throughout the process and they start cutting little Corners like that and wind up having a face pal moment I like to call it when they moved over when they move over to a firm and they’re like man I I really wish I I asked that question
Don’t Skip Compliance + Talk to References
Unknown: yeah I mean it really does happen so often I mean I think about the the different touch points an adviser has with a broker dealer and you know there’s the service side of things and I hear from a lot of advisors you know I’ve got an administrative support and they deal with all that and it’s really not all that important to me
Unknown: I think you know and yet still we’ll have a lot of advisers they’ll talk to a service environment they’ll look at the technology they’ll there’s kind of some table Stakes that many advisers tend to do
Unknown: I think there’s a lot of things advisors actually when you say cut corners to me one of the most active touch points between a broker dealer and an adviser and this is among W2 firms and 1099 firms is compliance and you have more direct and indirect contact with compliance on a daily basis at every firm than I think every adviser even recognizes and when you’re doing due diligence overwhelmingly advisers don’t even think about adding compliance onto their agenda and talking to somebody in compliance yeah and and it really is you know that’s an area that absolutely to your point on social media it’s not just having the conversation with compliant it’s then drilling into the way you do business and the tools that you’re going to want and it’s not even the way you do it in the past it’s the way you might be looking to do it in the future
Unknown: you know here are the things I’ve never been able to do can I do these things here because I know some I have friends that might be able to do them you know and they’re at a different firm you know and so really is not just having the conversation but D really digging into the compliance and and that’s just an example of of where you really have to spend a lot of time because that’s where you get that that you know oh my gosh moment of I just made a bad decision you know
Unknown: and and I’d say the other thing that advisers can do is is is while you may have a friend at a firm is talk to references talk to other advisers who are at that firm my experience is advisors never lie to each other even the ones that are happy at their firm they’ll tell you about if you ask the right questions they’ll tell you about their their pain points just because someone has pain points doesn’t mean it’s a bad firm it’s really about just being aware of where those pain points May lie for sure
Mistake: Skipping the Home Office Visit
Corey: so this next one is my is my personal pet peeve and it’s it’s it’s financial advisers not going to the home office visit you know they’ve probably spent you know 40 plus hours of their time at this point exploring different firms narrowing down options and some financial advisers will be really really hesitant to fly out to the home office visit whether it’s because they don’t want to spend the 36 hours away from their business or they feel like they’re going to get in like a high pressure type of um uh time share type of situation where they’re trying to close them in a in a locked room or or or or whatever it is they have some hesitations to going to the home office
Corey: and and my opinion that’s where a deal is is made or broken that’s where you get the feeling of a culture of an organization that’s where you’re looking the people in the eye and asking questions and getting to know the people that you’re going to be working with every single day for the rest of your time um at that firm and you wouldn’t even buy a $50,000 car without going to the the showroom and looking at it and taking it for a test drive once again this is potentially a multi-million doll asset that you have here and I’ve I’ve seen more light bulbs go off positively or negatively um in home office visits than than anywhere else
Jeff’s Take: Comparing Home Office Visits
Unknown: you know over the years here uh so I’ve had I’ve been in my own company with bridgemark here for 10 years and and I would say I’ve probably been to maybe 20 or more different firms uh so I’ve really had the opportunity to visit a lot of home offices sometimes they’ve just flown me out and and sometimes I’ve flown out on my own sometimes I’ve gone with advisers but I’ve had an opportunity to see a whole lot of different firms from large firms to small firms to Independents to Ras
Unknown: and what’s really interesting what you just said is it’s very true they all have their own culture and when you go in there and they all say this right everyone says hey we’re different we have a different culture Etc and and and it’s one of the hardest things to Define as an advisor when you compare firms because the recruiter will literally say the exact same thing
Unknown: how many recruiters have have anyone heard them say hey we have a great culture and we have great technology and a lot of recruiters say that exact same thing and what you see when you go to a firm and it’s almost not even as much as what you see it’s what you don’t see right what is the firm showing you well they’re showing you their best their best resources their best you know not not even people but the Departments that they really shine and one of the things that they’re not showing you and when you compare two different firms if you go on two different home office visits you’ll really start to see a comparison and a differentiation between the firms and and it’s so important to spend the time uh it is time well spent you know
Explaining the Choice to Clients
Unknown: and and I would even say the last thing about it is for those folks that are looking to make a change of firms part of what you’re what you’re thinking about is you’re just what are you going to say to your clients and there are clients that won’t even ask questions as just say hey no problem sign the paperwork and that’s the end of that but there are other clients that may ask you and certainly your larger clients may ask hey how’d you pick this firm
Unknown: and so it’s really beneficial to say well I started off working with a consultant the consultant helped me curate some some select firms based on what the business is the way I handle my clients Etc and then I went and visited the firm and spent time really meeting the people and and this is what really helped me to to to convince me that this was the right firm for me and when you have that full story to your clients it really goes a long way um you know
36 Hours vs. 4 Months Twice
Unknown: so Corey I totally agree with you where the home office is is really important but I would also add you really will see a difference between different firms in how they present and how they really just approach the business even though it’s the same business they approach things differently
Corey: yeah I I was talking with a recruit probably six months ago from from from Wells Fargo um that wound up recently moving and they said Corey if he just had a brand new child and he said said Corey my wife is going to kill me if I’m gone for 36 hours and I said what your when your wife is going to be really upset is when you go through four months of work to make a transition and then a year in you figure out you’re at the wrong firm and you have to do it again for another four months that’s that’s a lot less than than 36 hours of time
Unknown: yeah yeah and you’ve lost some clients in the interim as well
Corey: yeah with without a doubt yeah
Mistake: Not Using a Consultant
Unknown: that’s a great list though Cory of what you’ve got of as you talk things of of you know work that advisers should be doing you know really just making to help them make a smarter decision you know we spend some time talking about you know what are some some main areas there
Corey: yeah I mean really really the self-serving one is you know just just not using a consultant just advisers don’t understand how many firms are out there I always explain it as like a Cheesecake Factory menu size of options there’s hundreds and hundreds of options and Jeff me and you are constantly researching the industry every single day and even us we come up and find new opportunities that are popping up every single day
Corey: so if you’re an adviser that’s running a business and taking care of your family at night there’s just no way that you could keep up on all of the options that are out there and get a true understanding of the offerings that are out there without having a conversation with a consultant
New Firms Still Pop Up
Unknown: it’s you know so true just literally the other day Corey you introduced me to a new firm I think they had actually looked at one of your podcasts and or YouTube videos and and they reached out to you and you reached them you had me speak with them I had a great conversation with them I’m not going to give details about the particular firm for this call but really unique story really successful that success that they’re having and we now have a new agreement you know
Unknown: we’ve got you know as a firm probably 130 different agreements with firms and we’ve talked to probably three 100 different firms over the years and it’s still just a drop in the bucket of the available choices that are out there uh
Unknown: and and the other thing it’s it’s interesting is if when we look at this on a rolling two-year basis which is how I measure this we’ve had advisers that that we’ve worked with that have joined over 35 different firms and so there’s a collective knowledge a collective learning that we’re out there in the marketplace every day looking at firms but we’re also out there in the marketplace every day talking to advisers who are evaluating those firms who are negotiating those firms who are getting deals from those firms and so there’s just a lot of learnings that that are good consultant and so while this may be a self-plug the reality is a good consultant can help an advisor looking at at the marketplace and and help improve their decision- making and help them avoid making mistakes
Wrap-up
Corey: yeah absolutely I really hope this is helpful to to everyone if you have any other questions on the general landscape or making a transition we have plenty of PDFs of questions that you should be asking and other coaching things we could do to make sure that you streamline this process as much as possible uh avoid more mistakes and make the best decision you possibly can in the limited amount of time that you have
Corey: I really hope that this helped Jeff thank you so much for your time and I hope everyone has a great day
Unknown: thanks Cory
