Recent trends in the financial industry suggest that another wave of sell-offs or consolidations may be in the offing.

In today's economy, the whole is often not worth as much as the individual parts that comprise it. Is your unit up for sale and your manager just isn't telling you?

Truly savvy advisors always have a "Plan B" and usually don't wait until their units or firm are being sold off to start thinking about their next step. Alternative career paths just don't happen overnight and they most certainly don't happen on your exact schedule.

Whether you're a 15-year wirehouse senior vice president managing 75 advisors or a 20-year financial services veteran with a million-dollar book, the time to understand your career landscape and develop a Plan B is not when you're faced with a change—it's now. Exploratory meetings and relationship development should be essential components of your own career path and the foundational elements of any Plan B strategy.

Take, for example, the situation that John found himself in. With 14 years in the industry, John's business had been on a steady decline for the past four years. In fact, in his tenth year, John had reached his production pinnacle. He was producing just over $500k, with about $55 million in assets and working at a wirehouse. The idea of becoming affiliated with his employer was never a consideration for him—that is until the financial crisis turned the industry on its head and found John transferring his book three times, while steadily losing what he thought was his very loyal clientele. So where did John go wrong?

Affability aside, John had never even considered a Plan B before the crisis and was totally blind-sided when the economy went into a tailspin. Even though John was a decent producer, by New York City standards, where he was based, he was no superstar. By the time of the turmoil there were a slew of Johns running around trying to find new homes and rival firms had stopped taking new meetings with advisors if they weren't already known.

Even the best recruiters had a hard time getting a guy like John in the back door and at a lower-than-competitive deal. In John's case, though, he took matters into his own hands. He reached out to every independent firm with ads in the back of every trade rag. He was sold a bill of goods while in a frantic state. The average producer of his new independent firm was probably $100k at the time. He quickly followed suit. He lost clients because of a lack of due diligence. John hadn't checked whether all of his managed money would transfer. Plus, most of his money managers were not approved by the independent firm, so they couldn't transfer properly. Because of a lack of platform and overall poor transition team who overlooked the "fine print", John ended up with three formal customer complaints. Suddenly, John found himself with not only half his client pool, but also a disciplinary record. Fast-forward to today—and three employers later. John's book is approximately $50k and he's debating "one last change."

While half of me thinks that the unemployment line should be calling his name, the other half hopes that he finally makes the right decision for himself and the few clients he has left. If he puts his head down at a decent little shop that is known for keeping their employees happy and gives it one last try, he should be able to rebuild. However, that shouldn't be the case for a 15-year industry vet.

What's Not to Love?
Then there's Dan, an advisor for 10 years, who transferred into management. He's run offices at two different wirehouses in the same town for about 20 years.

His last gig had about 45 financial advisors on staff. In a city with a population of slightly less than a quarter of a million, Dan was pretty convinced that he was the best and only game in town at least when it came to being a wirehouse manager. His "I run this town" attitude prevented him from meeting new people. He actually was convinced that he knew them all.

Unfortunately for Dan, times change and so do people. Whenever a recruiter would call him to introduce him to a new or even an old contact, he would refuse and insist: "I already know him."

Truth is, he may have known someone 20 years prior, but his overall lack of communicating with everyone led to the ultimate demise of his management career. Had he maintained close contact with recruiters and peers alike, Dan would be in a different position today. Instead, his ego and narcissism killed his career. Today, he is a lower-than-average producer working out of an office he once managed. There had been a couple of positions that popped up in his area when Dan was still in management but nobody bothered to contact him about them.

In a world where the business isn't getting any larger and consolidation is everywhere, it pays to have as many eyes and ears open at all times as you can. If there are potentially 15 likeable managers and another 40 who are not in the area, why even bother contacting the unlikable one?


Playing it Safe
Nick called me not too long ago. Nick and his team produce over $2 million with over $300 million in assets under management. They are one of the larger teams that kept to the wait-and-see approach about moving their practice throughout the financial crisis. I can't say that it's been bad for their business because it hasn't.

The team has grown another 25% or so over the past three years. The last time they really looked around was back in 2009. It's been interesting to see just how much has changed in the management landscape since then. Half of the managers they were originally speaking with no longer work at their respective firms. As a matter of fact, the whole chain of command is different and in a couple of cases, the firms they knew and followed don't exist.

Nick's initial impression was that it was okay, that the people may have changed firms, and since he knew them it would all be the same in the end. While I certainly know the new chains of command and how to work them, Nick would fall a bit short going solo.

It's important to be familiar with the cast of characters you may be working for because you may just decide that what seems great on the outside just isn't the place for you. That said, while no decisions have been made and likely won't be for quite some time, we are headed in the right direction.

Nick and his team are also taking a serious and in-depth look at the registered investment adviser and independent space. Such an exploration couldn't be conducted before now because of time constraints and overall panic in the marketplace.

Whether the novelty and write-ups about the "breakaway broker" will ever become more than a great headline is yet to be seen. Nick and his team are determined to take the time and make the effort necessary to decide what's best for their clients, themselves and their families. One thing is certain, it's a challenging world out there, so be prepared to change with it.

Ultimately, Nick's doing an excellent job figuring out his Plan B. This time, though, he's realized that developing the plan is actually an ongoing process. They, like so many others, let it drop with a complacent attitude toward their careers. I say to them: You have worked so hard to get where you are, why on earth would you give up minding the shop?

The brokerage world isn't on autopilot anymore, and you shouldn't be either.

Relationship development never really ends. Let John's and Dan's paths be a hard lesson. Look to the future before your current situation ends—because if you don't, you just may be on a path to extinction.

Carri Degenhardt-Burke runs Degenhardt Consulting
in Jersey City, N.J. For more information, call
201-395-0222 or visit

Register or login for access to this item and much more

All On Wall Street content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access