March 7, 2012 / 10:46 PM / 7 years ago

YOUR PRACTICE: When teaming up, don't hurry love

* Advisers rush into teams

* Take time to date first

* Branch managers are matchmakers

By Jennifer Hoyt Cummings

March 7 (Reuters) - 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 clients.

“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.


Advisers should start their hunt for a partner with a matchmaker.

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 said.

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 clone him.”

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