What follows are my initial comments as the webinar began:
“I have three daughters who are all registered in the industry, and it was very important to me to pass my business on to one or more of them. At my prior firm, Edward Jones, most of the advisors over the age of 50 were talking about how to transition our business to the next phase and next generation of advisors. We wanted to be able to move the book over to someone we knew.
“When I approached the broker/dealer about my succession plan, their plan consisted of me giving half of my book to someone my clients had never met, and the other half of my book going to my daughter only if I retired. I did not want to retire. I have no intention of retiring for 10 years, but I think if you are not doing your succession planning 10 years ahead of time, you’re running behind the curve.
“I made it clear to my broker/dealer that passing my business to one of my daughters was a vital part of my long-term planning. And after two years, I realized it was not likely to happen. That was the spark that lit the fire.
“I started doing due diligence on the different models for financial advisors and the broker/dealers for those models. Along the way, I realized it wasn’t about the money. It was about the culture. I wanted the freedom because I knew if I had the freedom and the ability to take care of my clients, the rest of it would take care of itself. Ultimately I chose to join Cooper McManus, which is a super branch with Securities America, because they fit that desire for freedom to serve my clients to the best of my knowledge without having any undue influences as far as to product or philosophies. It was totally up to me to serve my clients in a compassionate, legal, moral method and that is exactly what I chose.
“I took my staff on three of the due diligence visits, so they were able view what it would be like to work with the broker/dealer. They were dead set against the wirehouse environment, because the freedom to really be partners in the business wasn’t going to exist; it was more of an employee/employer relationship, and that’s not what we wanted. I wanted to be an independent businessperson and to be able to manage and bonus my staff appropriately.
“I sought help with an attorney firm and prepared for my transition. I made sure I was on the correct side of the law and did my proper planning. Still, my former broker/dealer filed FINRA complaints and legal actions alleging I had taken mailing labels that belonged to them. The reality was that I had not taken any client information at all from the office they provided me. Instead, I sent out a postcard to a purchased mailing list of 17,000 homes of value over $400,000 in three zip codes in my area. The postcard announced my leaving and starting my own firm. Miraculously, that caught about 90 percent or better of all my clients. We got an abundance of phone calls right away from people that got the postcard.
“I declined several settlement offers from Edward Jones. Ultimately, the Superior Court ruled I could service those clients who contacted me. A year later, FINRA agreed, denying the broker/dealer’s claim against me.
“When it’s all said and done, the real point is to have the courage to stand up and stand tall if you didn’t anything wrong. I was able to prevail. I was also able to create a website, www.TheBoldAdvisor.com, to help advisors in similar situations. I’ve had calls from financial advisors all over the country, and many of the letters I’ve received and the articles written about my experience are on the website. I felt it was important to give back to other people who are contemplating the battle and other people that have been through the battle. I felt it was important for them to feel they are not alone.
“It took about six months for the transition. My revenue slipped slightly for about six months, but I expected that. We transitioned over $100 million of assets relatively quickly, and now we manage about $135 million of assets. Our revenue is going to be just shy of $1 million this year.
“The thing that most pleasantly surprised me was the respect and amount of professional help and advice we got from Securities America, and how much they were able to contribute to making my transition easy. It was a difficult transition, because it’s a large book of business, but Securities America was up to the task; they and Cooper and McManus did an awesome job of helping me with that process.
“I’m incredibly ecstatic that we moved to independence. The road was definitely bumpy along the way, but in retrospect, I’d go through it all again just to be where I am right now. My daughter has joined me in my business, and that is an incredible a joy, because she is a wonderful business partner and be a great person to pass this business on to.”
Part 2 of the transcript is coming soon. Meanwhile, please look around this site and Contact Me if you have any questions or would like to discuss a possible transition away from your current firm.
Wishing you happy holidays as you contemplate the New Year,
John Lindsey, CFP®