You can lead a broker to an entrepreneurial opportunity, but the desire to take the plunge needs to come from deep within and maybe family experience

October 4, 2012 — 4:22 AM UTC by Guest Columnist Abby Salameh


Brooke’s Note: Are independent advisors, like mythic salesmen, born and not made? The question is not academic for the RIA industry, which is using stockbrokers as a raw material. See: The hidden dangers of hiring a laid-off Merrill broker. Abby offers her consultant’s eye view in this article.

I recently attended a networking session where there were many wirehouse advisors. We were having a lively and honest discussion around the industry. I was seated at a table with three well-producing advisors. These advisors were nervous. They were feeling as if they had intense pressure to “hit their numbers.”

Vanishing payout

Their “complex manager” had recently been demoted to a producing manager — meaning that he now had to also generate his own revenue in order to maintain his employment, and they were telling me that they expect their payout to drop from 35% to 30% any day now.

They were interested in discussing their options. Being the chief marketing officer for Fusion Advisor Network and an executive for NFP Advisor Services Group, it was a topic I was eager to jump into. See: The art of breathing: How to handle the overwhelm of being a financial advisor in 2012.

I started to discuss the benefits of independence with them: freedom to conduct business the way you wish, a wider selection of investment solutions, no proprietary products being pushed, being your own boss and creating your own legacy, a much higher payout (100% if you are a RIA). Sounds like a dream come true, right?

Then I read this article, The Myth of the Entrepreneurial Personality, and it got me thinking about whether or not this idealistic model of financial advice is really the right choice for everyone. (see the bottom of this article for an excerpt from Michael Hess’ article.)

In this same stream of consciousness, I recall launching the InvestmentNews Going Independent Workshop Series when I was consulting for them years ago. I distinctly recall having a conversation with a high-producing Smith Barney (now MSSB) advisor. His name was Steve, and he was very interested in going independent. Then he attended our workshop and his viewpoint changed. Why?


Here is what I recall him saying, “I don’t have the time or the passion to be thinking about hiring my own staff, picking my own technology, worrying about compliance, finding office space and running a business.” It was at that moment I realized there is an inherent gene that advisors must have in order to take that leap of faith and become independent. It is a gene that includes a strong desire to be your own boss, to run your own business, to build a firm to pass along or eventually sell. It is also a gene that includes a strong desire to take on the “fiduciary” responsibility of always doing the right thing for your clients.

But, is there a “mold” that each independent advisor fits into? No.

My old boss at TD Ameritrade, Tom Bradley, used to say, “Advisors are like snowflakes. No two are the same.” And this still resonates with me today. As I travel the country and work closely with many of our advisors within the Fusion Advisor Network, I can honestly say they are completely different. They each have different personalities, different business models, different clients, different economic situations and different goals and dreams. They certainly do not fit in a mold of any size or shape. But the one thing they have in common is this drive to be a true entrepreneur and not be confined to the limitations they had at their previous broker-dealer as an employee.

But, is that all? Is that their only commonality? Could it be that there is something else that predisposes a financial advisor to want to be an independent advisor? I decided to take a short, informal survey. I called 10 advisors I know well and started poking around. What surfaced was not surprising. All but one of them had some influential person in their lives who was an entrepreneur. Whether it was their father, their grandfather or a very close friend, they all could actually tell me who influenced their decision to want to become a business owner.

Woman’s grit

It was a dream they aspired to achieve from a very young age. The one advisor who did not have that influence was female. And she said, “At that time, you were hired in financial services to be an admin if you were a woman. I knew I wanted to be more than that so I had no choice but to go out and do it myself.” Her grandfather was a small-business owner but he passed away when she was young, so she wasn’t sure if that had an impact on her decision.

I continued the conversation with the three wirehouse advisors I met at that networking dinner. Two of them were really not interested in having to open their own shop and deal with the responsibilities of going independent. One of them is. He has that fire in his belly to do his own thing, to run his business the way he wants and to create a legacy to pass down to his children. He has that “gene.” Oh, and his father owns his own hardware stores.

Here is Hess’ take on what it takes to be an entrepreneur;

I do think there are characteristics that are common to most successful entrepreneurs, and without which one should probably not choose this path. Most successful founders and owners are fiercely independent and able to work in a hectic, ever-changing, unstructured environment (in fact, most of my small biz friends and I agree that we’d suffocate in the corporate world).

Most also are resourceful, good at solving their own problems and doing more with less. All have their own version of passion and believe in what they’re doing (not to be confused with the eternal optimism or “never give up” myths). All of them sacrifice, work hard and do whatever it takes to make a go of it.

The image of the entrepreneur as a go-for-it-all, never-say-die, unflappable, steamrolling force of nature is romantic and cool, and makes for great stories in business magazines. There are certainly great company founders who fit that description, and for the most part I admire them. But possessing all those attributes won’t necessarily make you a winning entrepreneur, nor does lacking some or even most of them preclude success.

_Abby Salameh brings to Fusion Advisor Network 20 years of experience working directly with independent advisors. Having started her career at Sanford C. Bernstein & Co. Inc. in 1992, Abby went on to help launch InvestmentNews for Crain Communications Inc. In 2002, she joined TD Ameritrade to head the marketing efforts for its institutional services. More recently, Abby has been providing strategic and tactical marketing consulting for leading industry firms, including large broker-dealers and independent advisors. She joined Fusion Advisor Network in September, 2011. _See: What exactly is Fusion Advisor Network and who did it draw to Las Vegas last week.

Mentioned in this article:

TD Ameritrade
Asset Custodian
Top Executive: Tom Nally

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