* Advisers rush into teams
* Take time to date first
* Branch managers are matchmakers
By Jennifer Hoyt Cummings
March 7 May-December partnerships are
increasingly popular among financial advisers. A junior adviser
gains a mentor and eventually inherits the business. A senior
adviser gains a go-getter who brings in new clients and a
built-in succession plan.
Finding the right partnership in an industry where personal
is professional can make finding a spouse look easy. Today: a
look at how senior advisers can find and woo the right partner.
Friday: how an airtight contract can make the partnership last.
Financial adviser Timothy Belber , 55 ,
had hopes that a partnership with a young adviser who had good
connections through his wealthy family would be a success and
complement his three decades of experience.
But three months after Belber, now a principal at
Denver-based Generational Wealth Planning & Design LLC, teamed
up with the newbie, he realized he had made a mistake.
Belber was chatting with the adviser about his past
experience and asked him why he left a job at American Express.
The response: after a year there the adviser felt like he
couldn't learn anything else from the company.
It was a red flag and Belber realized he should
have asked that before taking on a partner. This superiority
complex played out in meetings, when the young adviser would
interrupt Belber with out-of-context comments that unsettled
"He started to really believe he was on par with someone who
had been doing this for almost 30 years," Belber said. The
partnership lasted just a couple months longer.
It's a common mistake. A senior adviser eager to find a
successor rushes into a cross-generational partnership, without
doing all of the in-depth due diligence any adviser would do on,
say, a client's retirement plan.
Teams that last share a common trait, say business
development experts: they dated a while before tying the knot.
FINDING A MATCH
Advisers should start their hunt for a partner with a
Branch managers can serve in this role for wirehouse
advisers. Independent advisers can turn to their liaison at the
firms that hold their clients' money, like Fidelity or Schwab,
or the wholesalers who sell them investment options, like mutual
funds. These people spend their days talking to advisers in the
region and may know someone who wants to team up.
But be aware, these sources may have their own agenda. A
branch manager, for example, may think a young adviser is bound
for failure and wants to find an experienced adviser who can
capture his client's assets if that happens.
"The branch manger's boss is the firm ... that's
where their primary allegiance resides," cautioned Jeff Spears,
co-founder of Sanctuary Wealth Services LLC, a provider of
business services and consulting to independent advisers.
Paul Granito, 34, a New York-based senior vice president
with RBC Wealth Management, believes junior advisers should have
at least $30 million in client assets before they can be
considered a good partners for experienced advisers.
T his indicates a strong foundation and suggests a
partnership won't just be a way to leech off someone more
experienced, Granito said. He estimates he had more than $60
million in assets five years ago when he teamed up with his
partner, George Feneis, who is 71.
Denver-based Belber said how client money was gathered is
important. An adviser who built a $12 million book of business
on her own is likely to be a stronger partner than
someone who got a $30 million account from his parents, Belber
Other important considerations: does the junior adviser have
a scattered work history, which could indicate he is not
committed to advising? Does the junior adviser show little
interest in learning from you, a sign she just might be out to
inherit your book of business?
Meanwhile, junior advisers should talk to current and former
colleagues of a potential partner to make sure the senior
adviser doesn't have a history of dropping protégés after
stealing their best clients.
Avoid the urge to elope.
About once a month, Ben Marks, 51, president of LPL Financial
affiliate Marks Group Wealth Management, gets a call
from a young adviser who is hoping to land a spot at the firm.
Minnetonka, Minnesota-based Marks likes pairing up with
junior partners who can bring in new clients to the firm, but
most of the young advisers who call him seem to be trying to
save their fledgling careers.
That's why he was intrigued a few years ago when a
wholesaler suggested he talk to Patrick Deeg, a young Edward
Jones adviser who had attracted about $30 million in client
assets in about four years.
Marks began courting Deeg, now 29, by taking him to a
Minnesota Twins game and later a charity gala. Marks watched to
see if Deeg clicked with the firm in a social setting.
Next, the pair began weekly dinners for a couple months to
talk business. Marks liked Deeg's approach to establishing
fee-based relationships with more of his clients.
Deeg liked that Marks took nearly a year to get to
know him and didn't try to rush into a deal. Finding that fit
was more important to Deeg than the large signing bonuses a
couple big brokerages had dangled in the interim.
Marks said that investment of time with Deeg, who joined the
firm a little over a year ago, has paid off: "I would like to