Description
Partnerships can provide a means through which financial advisors can bring together their complementary skills and resources to create a larger practice or simply to give each other much-needed time off. Watch the video to learn what you should consider when choosing the best partner for you.
AI-Generated Transcript
How to Choose the Best Financial Advisor Partners
[00:00:00] Antoinette Rodriguez: Forming a partnership can be a very productive move for a financial advisor. Partnerships can provide a means through which the two partners can bring together their complementary skills and resources to create a larger practice or simply to give the other person some much-needed time off. One partner may supply existing accounts for money management. Another partner may provide specialized product or service knowledge or support staff. And yet another partner’s role may be bringing in new clients. Or as we like to say in the business, hunting. But forming a partnership, like any major FA business decision, can be fraught with peril. A business partnership is like a marriage, but possibly without the love.
[00:00:55] Antoinette Rodriguez: First off, the worst thing you can do is choose the wrong partner. [00:01:00] You should ask yourself, before making a definite commitment, if you have discussed the fine-tooth details of the partnership with your potential FA partner. Are you confident that you both have the same goals? For example, we have seen many FA partnerships either fall apart or be greatly strained by non-agreement on the velocity or growth level of the practice.
[00:01:26] Antoinette Rodriguez: Is one partner ready to sit back while the other is in major rainmaking mode, for example? Do you have the same approach to the business? Do you have an agreement on more or less risk orientation towards the client’s money? Do you have the same ethics; the same way of conducting business? Then there is the get-along for the long-term issue. For you might like your potential partner on a limited basis, but do you really think that you can spend many years just like a marriage, working closely [00:02:00] with him or her?
[00:02:09] Antoinette Rodriguez: Even if you are confident and know the other FA well, are you rushing into the partnership too fast? Too many partnerships are put together with the enthusiasm of the moment and without a thoughtful business plan. Each partner’s time commitment and roles should be clearly understood at the beginning.
[00:02:27] Antoinette Rodriguez: Roles and expectations are areas we have seen a lot of conflict among partners. For example, if your partner is the rainmaker and spends a lot of time playing golf or entertaining clients, might you, the inside money management and relationship manager, consider the rainmaker’s activities to be real work?
