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What You Should Know Before Leaving Your Firm

When it comes to leaving your firm, there are certain things every planner must know to avoid making mistakes that could have a negative impact on their career. It’s a topic that affects almost every financial planner, but is rarely, if ever, talked about in a public way. Let’s dig into what you need to know, including how it’ll affect your next steps when you make your exit.

Know the Repercussions of Your Actions

When you accept a position with a firm, you’ll most likely be asked to sign documents like confidentiality, non-solicitation and non-compete clauses. While it’s easy to write these documents off as “new employee paperwork,” you must understand that these are legal documents that can come back to haunt you later.

Here are some best practices for handling that paperwork:

  • Make copies of your paperwork. After you give your notice and have one foot out the door, it can be awkward to make requests of your soon-to-be ex-employer. You can avoid this by making copies at the beginning of your employment and filing them away for safekeeping.
  • Understand what you’re signing. If you’re going to sign a contract, it’s good practice to have it reviewed by a legal professional, so you know what your liabilities are. As a new planner or someone transferring firms, you don’t always know what to look for when reading a legal document. In general, you want to find out who owns the client, who can contact the client and what will happen if you take your client with you to your new firm.
  • Read the fine print. Some firms have contracts that require you to give a lengthy notice period. If you’re starting a new firm and think you’ll be able to hit the ground running two weeks after you give notice at current firm, you might find that you have to stay for another 30 days.

For more information about this topic, check out “What Did I Sign Up For?! Understanding Non-Solicit and Non-Compete Agreements” in the June issue of the FPA Next Generation Planner.

Plan Your Exit Well in Advance

Right now, you might not think that you ever want to leave your current firm. But there may come a time when you feel ready to start your own practice. In that case, it’s helpful to understand what it takes to make a smooth transition. Think of as many aspects as you can and how you’ll deal with them if that time comes.

  • Be ready for the unexpected. You might give your two-week notice and get escorted out immediately. If this happens, you could lose access to your contacts, emails and files. If you prepare in advance, you may be able to retain some of your clients, so you don’t have to start a new book of business from scratch.
  • Pay attention when others leave. Odds are, the way your firm’s management reacts to your co-workers when they head out the door is the same way you’ll be treated. This will help you prepare when it’s your turn.
  • Keep your plans to yourself. If, in your excitement, you tell a client about your plan to start a new firm, you could be in violation of a non-solicit agreement. This would leave you open to legal action and also burn bridges with your old employer, which is the last thing you want to do when already dealing with the stress of starting a new business.
  • Use your work computer for work only. When you leave the firm, any personal information you have on your computer or in your email will be taken from you and archived at the firm. Plus, if you start forwarding a bunch of work email to your personal account, it will set off alarm bells with compliance.
  • Understand how your products work. Some firms use products that are exclusive to them. These proprietary investments or funds can lock your clients in and getting out of them can bring significant fees. If your clients are using these products, you can’t service them properly and it makes it difficult for them to transition with you to your new firm.
  • Make connections before you leave. If you have co-workers you’d like to stay in touch with, either send them a note on your last day or reach out to them on LinkedIn. Making these connections before you move on is much easier because you still have access to their contact information.
  • Plan ahead. Of course, it depends on your employer and its work culture, but the general consensus is that you’ll want at least three to six months of preparation before you pull the trigger. That way you have time to prepare and figure out how (and when) you want to announce your departure.

Consider Your Exit Interview Strategy

When your last day on the job arrives, you may be asked by the firm to conduct an exit interview. Some planners may think that this is an opportunity to air their grievances, but you should understand that your exit interview will be archived and what you say could follow you for a long time. While you may think that burning bridges isn’t a big deal, remember that this industry is still pretty small. If a future employer called your firm asking if they would recommend you, you may find that your future job prospects are limited.

You Will Rebound

No matter how you leave your firm—whether it’s on your terms or theirs—know that you can rebound from it. Even if your exit leaves a sour taste in your mouth, remember that your clients are the most important thing. You can take comfort in the fact that all the training and experience you’ve earned in your career will stay with you. You are a better adviser for it and can use what you’ve learned to help your clients, no matter where you go. After making the transition to a new firm, you’ll find the next one to be much easier.

August Cover

Editor’s note: This article originally appeared in the August 2019 issue of the FPA Next Generation Planner, an app publication that provides helpful and relevant content specifically for NexGen planners. Download the app in the Apple App or Google Play store.

Sarah Li Cain

Sarah Li Cain is a freelance personal finance writer. Connect with her on LinkedIn.


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Retirement Planning Lessons for Emerging Advisers

The leading edge of the baby boomer generation turned 65 back in 2011. Since then, we’ve watched a large percentage of the adviser population move closer to that traditional retirement age. But the transition to retirement has been anything but traditional, as many boomer advisers have chosen to remain ensconced at their firms. It has created an interesting dilemma for emerging advisers waiting to move into more prominent roles. Should we worry about history repeating itself when these emerging advisers age? If so, what lessons can the younger generation learn from watching boomer advisers (not) retire?

Setting the Stage

First, it helps to understand the reasons boomer advisers are increasingly choosing to stay in the business.

It’s not your grandmother’s retirement anymore. The Bureau of Labor Statistics predicts that the percentage of 65- to 74-year-olds actively looking for work will increase faster than any other age group through 2026. When you think about it, it’s not particularly surprising. After all, we’re living much longer than was thought possible when the retirement age was conceived back in the 1930s. In fact, the notion of retirement is outdated—it’s becoming much more of a life pivot.

Retiring successfully isn’t just about money. Health and wellness, family relations, leisure and social activities, and personal growth and development are all important. And everyone copes with the question of what’s next differently. The thought of leaving something behind if there isn’t something more profound to move forward to can be paralyzing.

Boomers come from an era that embraced “living to work” as opposed to “working to live.” Work has been the centerpiece of life. Professional achievement and financial compensation have prominent spots on the self-worth scorecard. Advisers have poured their heart and soul into building a business and serving their clients, making many sacrifices along the way. Plus, these advisers have seen and heard firsthand the difference their advice has made on the quality of others’ lives. Who wouldn’t want more of that?

It’s their identity. When boomer advisers were young, they juggled the responsibilities of creating a family and growing a business simultaneously. Then they reached the point where something had to give. Often, it was the passions of an earlier life—hobbies, sports, socializing with friends. After the kids left home, satisfaction was derived from the work itself, rather than from rediscovering those lost passions.

Founderitis is real. Whether consciously or not, a failure to delegate keeps founding advisers in a power position. Rather than developing the next generation of leaders, they hold tightly to responsibility. But none of us can go on indefinitely, which means the business tends to pay the price.

The Lessons in the Data

Nature, nurture and circumstance have all played into the industry landscape we see today. It’s not that it’s a bad thing necessarily, but it has created challenges both for boomer advisers struggling with how to pivot to the next stage and for emerging advisers who are more than ready to take the reins. It also offers some lessons that emerging advisers may want to take to heart as they develop a vision for what they want their life and career to be.

  1. Broaden your horizons. Be careful that work does not become the one and only focus of life. Spend time with your family, nurture your passions and hobbies and try to ensure that fun is an ingredient in everything you do.
  2. Be careful about scorecards. The industry lists many advisers aspire to be named to include quantitative criteria like AUM and wealth of clients served, not qualitative data like family dynamics, life enjoyment or how you give back to society.
  3. Expect to pivot. Emerging advisers have seen firsthand how some boomer advisers are struggling with retirement. This industry is changing fast. A long-term career will undoubtedly include even more pivots than your older colleagues have experienced.
  4. Hire people who are smarter than you and delegate to them if you want a business that will outlast you. That means reinventing yourself to add new leadership value.
  5. Check your attitude and behaviors. Be open to new opportunities.

What does this really say? Build a life—not just a career—and then work hard to protect it!

Joni Youngwirth_2014 for web

Joni Youngwirth is managing principal of practice management at Commonwealth Financial Network in Waltham, Mass.


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Best of 2018: Things You Shouldn’t Say to Grieving Clients

Editor’s note: Until the end of the year we will be publishing the top blog posts of 2018. This post is about what not to say to your grieving clients, which I wrote shortly after my dad passed away in July and I witnessed how our parents’ financial adviser was a shining example of how to interact with a client’s family after a death. 

The unthinkable happened this year.

My dad died.

We’re still living this nightmare that started when he got sick. Oftentimes, kind‐hearted well‐wishers unknowingly make it worse with the things they say, but my parents’ financial adviser is not one of those people.

I remember Mr. Vincent Rogers since I was a little girl. I was frightened of him for a long time simply because when my parents took out life insurance policies on us when I was 9, I was terrified to have blood drawn and I blamed Rogers for my fear.

Rogers was not just a financial adviser, he was also a friend to my dad, as he relayed to me when he paid his respects at my dad’s funeral.

“Do you remember me?” he asked.

“Of course,” I responded before thanking him for joining our family to celebrate our dad’s life.

“Your dad was my great friend,” he told me.

He relayed a story about how when he was a young newlywed, my dad made his wife (who was from Colombia and at the time spoke limited English) feel comfortable because he spoke in Spanish to her. Oftentimes, Rogers said, my dad and he had philosophical conversations about life and marriage. He told me that he will miss my dad—and I could tell he meant it.

There is one guarantee in this life and that is death. Given that fact, there is a very high chance that your clients are going to experience the loss of a loved one in the course of your working with them.

A time of loss is also a time of heightened sensitivity. Understandably, it’s stressful to approach a grieving person for fear of saying the wrong thing. Death in a family can cause your clients to cut out their own family members, and if you say something offensive to them, they just might cut you out too.

Clients might hold you to a higher standard when it comes to communication skills, and especially during a time of loss. Avoid being offensive by steering clear of the following phrases:

“I can’t even imagine.” Andrea Raynor, hospice chaplain, writes in her book The Alphabet of Grief: Words to Help in Times of Sorrow, that this is one of the more hurtful things to say to clients who are grieving. She said that this is like telling your client that their situation is so horrifying that you can’t even picture yourself going through it.

“I know how you feel.” None of us know how each other feels, really, and especially not during a time of loss. We’ve all lost someone, so if you are trying to say you know how they feel because you too have lost someone, then tell them the specific story while also clarifying that you understand that we all grieve and feel differently.

A friend, who’d also lost her father not too long ago, reached out and instead of saying, “I know how you feel,” she shared a specific story of how she has coped with losing her dad.

“It gets better when you realize he’s always with you,” she told me. This has been incredibly comforting, and I think of it every day.

“I’m so sorry.” Amy Florian told the Wall Street Journal that your clients will likely hear this phrase thousands of times and it will likely not have any impact by the time you say it. She’s right. This phrase could open the door to a negative situation, also, Florian noted, like the client responding with “Not half as sorry as I am.” Instead, she adds, share a memory of their loved one if you knew them, the way Rogers did with me.

“Everything happens for a reason.” This is another one best avoided, David Kessler, author and lecturer on death and dying, told the Wall Street Journal.

“When you’re in deep grief, you don’t care about any reasons,” he said in the article titled, “What Not to Say to a Grieving Client.”

He advises to simply let your client talk. Allow for extra time for your meeting with them with the expectation that they’ll need more time to tell their story.

These are the four phrases that have been triggers for me, and upon further research I found them on several lists of what not to say to clients who are grieving. Simply avoid these phrases altogether, opting for an authentic, heartfelt story of your clients’ loved one. You’re not going to make them feel better, but you could avoid making them feel worse.

One last bit of advice: check in on your clients. They’re probably not OK one month, two months, even a year after their loved one’s death. You reaching out just to see how they are will mean the world to them.

Ana TL Headshot_Cropped

Ana Trujillo Limón is associate editor of the Journal of Financial Planning and the editor of the FPA Practice Management Blog. Email her at alimon@onefpa.org. Follow her on Twitter at @AnaT_Edits.