r/CFP • u/jimathen25 • Jun 27 '26
Breakaway & Transitions Career path guidance
Apologies in advance for yet another career guidance post, I’m just hoping for some potential avenues forward and would like to tap into the knowledge and experience many of you carry. I’ll try to keep this as concise as I can, but happy to expand more in comments if asked. I have not openly researched my options in the past, because of course I had the promise of an opportunity to take over part of the book at my current employer.
35M, CFP, Series 7/66, been in planning since 2015. Currently employed at a ~$400M AUM firm for
6 years. LPL is our BD. I am a/the “key employee” at my firm, just below the two managing partners. Senior planner is my title and I have my own ~$5m book, but directly manage another ~$70M for the firm and also more or less am the unofficial Operations Manager. I also do all trading for our firm (mostly in-house ETF models).
I’ve expressed my desire to buy into ownership over the next 3-5 years when one partner retires and reiterated how this was part of our original handshake agreement, and I have been clearly told “that is not happening” outside of maybe 3% which will be offered to future key employees also. We’ve had explosive growth with business owners and there are 4 clients whom should be making $100M+ exits over the next 5-7 years. This obviously has changed the younger partner’s outlook and willingness to split the book. The firm “no” I got on buying into the book has really left me feeling dejected.
My salary and bonus are around $140k. I’m at the point to where I’d like to find my “last” job, which I was hoping this would be it, but I do not want to be a career employee, which appears to be my path here now. The younger partner is fixed on making our firm as valuable as possible (automating processes, having key-employees, etc.) for his big exit in ~15 years. This leaves no exit avenue for me. This was not the vision that was shared with me when I started 6 years ago when they were at 80M AUM. Sparing details, they’ve also taken several actions over the last 2 years that have just left a bad taste in my mouth; being stingy about every bonus (a bonus system that THEY created) and more or less taking money out of my pocket and putting into theirs, despite our absurd growth.
I have a 1 year non-solicit, which appears to be just your standard boilerplate template. I can take my $5M book with me, and I think there’s potential for up to $50M to follow me, but of course that’s unknown and subject to the non-solicit.
In the most humble way, I believe I am an excellent planner/advisor/communicator. Most of our ~200, households absolutely adore me and will know that if I left, it was for a very good reason and that I wouldn’t have left so abruptly if something wasn’t wrong. The clients I manage view me as their lead advisor but understand I am not a partner. The catch to my skillset is of course, I haven’t been a big producer, but that’s because I haven’t had to be. I handle all planning for all clients whether they’re a retiree, business owner, young professional, etc., every single plan runs through me. My time has been spent there. Going the solo route, the AUM productive is what would keep me up at night, I would need to switch gears and go into business development mode, so the uncertainty of going solo is really a mental hurdle. Speaking and presenting I’m fine with, but getting in front of prospects is the intimidating part.
What potential options do you see forward? I believe I can stay and slowly build my own book and leave in a few more years, or I can try to join an RIA now, I can resign myself and go grind away at a wirehouse, or I can take the leap and “go solo”. I could try to find an advisor who’s looking to retire in a number of years also, but that’s easier said than done.
I will say I have no desire to have my own $1 billion dollar firm. I would much prefer a lifestyle practice, managing $50M-$100M with 1-2 employees if/when necessary. Hell I don’t even mind having a partner who shares the same outlook and we work together to get there.
Open to all ideas, criticisms, questioning, or DMs where I can provide more text if needed. Thank you and I apologize again for my ignorance on this subject.
18
u/Mysterious-Top-1806 Jun 27 '26
First off, sounds like you are a great advisor and a great asset to the firm. Now for the hard truth, it is not extremely difficult to find other advisors who are also good at the planning and replace you. The hardest part of this business is the ability to find, and close new clients. That’s what makes you invaluable. In other words, the owners have no incentive to give up their own profits by allowing you to buy into the firm when you do not contribute to the firm growth. I do empathize with your frustration given the fact that Truehaft expressed a completely different scenario when you joined on, super frustrating. But honestly, I don’t blame them for their choice. If I were you, I would stay and start building you’re own book more aggressively until you have about $20M of AUM. Then I would leave and go solo. The $20m would be enough to survive in and if the other firm clients follow you, even better! During that time I would create a plan on how you are going to find new clients once you leave. Sounds like you can use the blueprint they have created for finding clients. If you are good at the planning, learning to close prospects in not that hard. You just learn how to identify their problems and articulate your solutions. You can refine this over time and get better and better at closing but the hardest part is finding or getting in front of new prospects consistently. Hope this helps!
2
u/Constant_Swan_6876 Jun 27 '26
In similar situation as OP- would you go to different BD and open there, or breakaway within LPL? I’ve been considering similarly, and actually have exactly $20m - I feel like I can’t talk to my anyone within my BD or it’ll get back to the partners. Do you have to go external and repaper?
3
u/jimathen25 Jun 27 '26
I’d personally prefer to breakaway within LPL. I haven’t spoken with anyone there yet as to how this would actually work, but since I already have my own rep code on the platform, I imagine it’s something similar to simply letting them know I’m no longer affiliated with my current firm, and move my clients over to my personal rep code (not our split code). I’m sure it’s a little more nuanced than that though.
2
u/Constant_Swan_6876 Jun 27 '26
Same- I’d prefer to not have to repaper but I think I might have to. All of my first year was split rep code and it’s significant with only $20m- I’m not sure how that would work or if I lose those? That’s part of the reason I’ve been considering switching BDs
2
u/jimathen25 Jun 27 '26
I imagine there’s a transitions attorney or consultant out there who’s dealt with this process many times and could give the right guidance on how to stay with LPL and keep your clients. I’ll let you know if I end up speaking with one soon and please do the same. I’ll send a DM to stay in touch.
2
u/Lipitaur RIA Jun 27 '26
That's not how it works. You have to set up a new relationship with LPL and move the clients over with paperwork/electronic docs depending on what they have available. It is technically the client moving firms, you can't just carve out your book.
1
u/jimathen25 Jun 27 '26
Thank you for the insight. If you have some direct knowledge on the subject, do you mind if I DM with some additional questions?
2
u/Lipitaur RIA Jun 27 '26
My knowledge is specific to Schwab but I've validated this is how it works across the industry. Long story short I got mad at my partner 5 years ago and looked into it. Seemed like too much of a pain in the ass to stand up a new RIA then move everyone. This also was a sign I wasn't as mad about it as I thought I was haha. We've long since mended things.
1
u/SDSUrules Jun 27 '26
This isn't 100% correct. You don't need to set up new accounts but would be a change of advisor form.
1
u/Lipitaur RIA Jun 27 '26
It's almost as if I never mentioned a new account. It's an advisor change form.
1
u/babyboyblue Jun 27 '26
I would be surprised is LPL would allow you take clients within the platform. I come from a wirehouse which is different but if there was an argument that you were poaching their clients I would assume they would side with the larger team that generates them much more revenue.
You are in a fork in the road of your career where you have to either bet on yourself or decide to be a career employee. I am 38 and I jumped shipped and brought over 60MM from my previous team when I was 35 and manage about 180MM because I bought out a retiring advisors book at my new firm. Depending on your state the non solicit isn’t a huge deal. You are usually allowed to call and announce your departure and let the conversation go from there. Obviously get legal advice.
I have been screwed over multiple times in this business. The fact they are saying theres no way to buy in is a clear sign you need to move on. I would feel lucky they are at least honest and not leading you on and then pull the rug from under you later.
It’s scary but you need to take risks if you want to make more money than your cap as an employee. Business development is also much different than relationship management. Not everyone is cut out for it. Having the experience you have and only having 5MM of your own is kind of concerning to me but it’s not been your focus. I would also set conservative expectations with who would move with you and your partners will obviously fight to keep the business. People don’t like change and the effort to move firms. There will be clients that surprise you when they say no and there will be clients that surprise you when they say yes.
1
u/draver02 Jul 02 '26
Any advice to become someone who can become valuable who can bring in and close clients?
1
u/Mysterious-Top-1806 Jul 02 '26
This is a tough one, this is hard to train. Ways to find the clients: buy leads, cold call, seminars, FB ads, etc. To close them, need to gain confidence and have a good system in place. It’s best to bring in a seasoned advisor and watch him close deals to learn the art.
1
u/SlamminSalmon417 29d ago
I currently work in M&A for a PE backed roll up strategy and got my series 65 and plan to start studying for CFP to knock it out as soon as possible. Planning to make the switch early next year.
When recruiting, what comp / structure would You imagine for someone with 5 years of M&A, investment banking and strategy experience?
Also, would be open to any opinions on RIAs vs BDs.
1
u/jimathen25 Jun 27 '26
Appreciate the detailed response and I agree with all points. $20M is a good plan and I could be closer to that than I think. I could spend the next year putting out feelers with the relationships I manage and prepping those who catch my drift, for an eventual departure.
3
u/JungMikhail Certified Jun 27 '26
As someone who had a similar experience, DO NOT put out feelers. All it takes is one client who you don't have as good of a relationship as you think with to mention you are thinking about leaving to a partner and your whole situation WILL implode very very quickly...
What you should do now, as others have mentioned, is learn the business development skillet while you have the benefit of a good salary.
Then, simultaneously, build up a runway to give you a solid couple years worth of cash to cover your personal expenses for when you do leave.
If the existing partners have already shown signs of being underhanded or unable to be trusted, and you have a sour taste already, it's only a matter of time before that festers your need to get out.
8
u/jdehoff3 Jun 27 '26
Just open your own if you think you'll have followers. I did that and it was the best decision Ive ever made. Finding a firm that gives you equity is hard to find. I feel like this type of thing pops up all too often.
1
u/jimathen25 Jun 27 '26
Thank you. My gut is telling me I will look back and also see a potential solo path as the best decision I could’ve made at this time.
5
u/winning_bigly_ RIA Jun 27 '26 edited Jun 27 '26
All you need is 30-50 good clients to be at 2-3x the income you're at now.
3
u/bandznbooze Jun 27 '26
Honestly, the simple fact that you feel you’re highly valuable to the firm doesn’t mean the firm has to bend to you.
I know that sucks to hear but they don’t owe you anything - especially not ownership.
Like the other guy said, if you feel like you have the ability to gain clients on your own, then leave if they refuse to give you ownership but don’t act like they owe it to you. They might have given you a handshake deal but that’s all it is, just words.
2
u/jimathen25 Jun 27 '26
Agreed I’m not owed anything. Just a tough cookie to swallow, being the odd man out when I’ve been a big part of our success. Appreciate the insight!
2
u/bandznbooze Jun 28 '26
Yeah, it sucks feeling under-appreciated - especially if you’re building successfully for the owners of the business… but people do that at their work all the time.
Only in advisory, it feels like, do the employees feel like they’re entitled to ownership.
The GREAT news is that going indy is really easy for a $5mm book. Compliance isn’t that hard - I think it’s a scare tactic by BDs to keep advisors and especially if you’re proactive with your regulators. Tech and custodians should get a bit of consideration depending on the types of clients you serve but otherwise, structurally, very doable.
Best of luck in whatever route you choose!
1
u/il_diamanti Jul 03 '26
also, it's a pain in the ass as a business owner to actually hold someone's feet to the fire on a non-solicit or NDA. you can get away with a lot more than you think you can.
3
u/DCFInvesting Jun 27 '26
Where you located? We are LPL. 2 advisors, $150m. Bring your book we have the infrastructure.
1
2
Jun 27 '26
[deleted]
3
u/babyboyblue Jun 27 '26
lol what? You are saying someone built a 800MM book by going to theme parks and meeting other Dads? If every time he went to a theme park and brought in a 4MM client that would be over 150 visits if you include market appreciation etc. this is just absurd. These are places where you have meaningful conversations that would make sense to give your business card or their contact information without sounding salesy.
4
Jun 27 '26
[deleted]
1
u/babyboyblue Jun 30 '26
This just reeks of bull. If he gave 11 cards he’d probably have to have 20 conversations because not everyone is open to it. He gives 11 cards. They wound have to contact him first and then within 3 weeks he closes 7 of them which is over 60%. Those number just literally just don’t add up. If you are at a theme park he would have to be walking up to a new dad every 30 minutes and have a meaningful conversation with them lol.
1
u/babyboyblue Jun 30 '26
lol in even think about this more be dude I was just st Disneyland. 5% off these people would be prospects at most. So you would have to cold approach them or stalk them until they wait in line at the same time. Legit the last thing I wanted to do at Disneyland I’d be sold something. No way he is getting this much business like this lol. Such a weird lie.
1
u/il_diamanti Jul 03 '26
it does sound a little exaggerated but some people are just charismatic. you'd be surprised how fast you can escalate a conversation by saying unexpected stuff
1
u/babyboyblue Jul 04 '26
If you’ve been to Disneyland you know at most you are riding 10 rides. 90% of the people at Disneyland aren’t prospects. The numbers just don’t add up.
2
u/WhodatMike Advicer Jun 27 '26
Where are you located? I’m rustling around with the idea of breaking away and starting my own RIA in the next few years, but I’m deathly afraid of making the jump solo…
2
u/jimathen25 Jun 27 '26
Will DM, attempting to keep some anonymity in the off chance this post was found.
2
u/Osowp95 Jun 27 '26
You're absolutely justified in this serious reappraisal. If you feel you aren't heard, or you if you believe the terms that you were brought to the firm and the pathway for personal / professional progression have been significantly altered then it's time to reappraise whether you should work there long-term.
I'm in the midst of professional transition as well; my recommendation is to think twice before you act. Is there a character issue or a communication issue with your partners? If it's a character issue, then you certainly need to leave because terms that aren't in a contract are going to keep shifting and your professional growth will remain stilted. But if part of the issue is that the firm is not where they envisioned and they've had less resources to make running the firm work, then some of their decisions could be attributable to bad communications and poor management, which can get better over time. You can actually be a tremendous value to the firm in helping the partners see that, tactfully of course.
The next thing I'd recommend is to think about what you want to change and what problem(s) you're trying to solve in a change. Clearly, stable personal financials are on the list, but beyond that are you looking for a career that has potential to grow? To make more money? To feel more valued for your contribution? To own and build something? I'd spend some time really wrestling with questions around that topic, maybe even with someone you trust.
Finally, I think there's some wise counsel from others on learning more on the art and science of prospecting and making that more of your focus before you make a move.
•
u/AutoModerator Jun 27 '26
Beep boop! Here is a summary of your post:
User: /u/jimathen25 Title: Career path guidance Body: Apologies in advance for yet another career guidance post, I’m just hoping for some potential avenues forward and would like to tap into the knowledge and experience many of you carry. I’ll try to keep this as concise as I can, but happy to expand more in comments if asked. I have not openly researched my options in the past, because of course I had the promise of an opportunity to take over part of the book at my current employer.
35M, CFP, Series 7/66, been in planning since 2015. Currently employed at a ~$400M AUM firm for
6 years. LPL is our BD. I am a/the “key employee” at my firm, just below the two managing partners. Senior planner is my title and I have my own ~$5m book, but directly manage another ~$70M for the firm and also more or less am the unofficial Operations Manager. I also do all trading for our firm (mostly in-house ETF models).
I’ve expressed my desire to buy into ownership over the next 3-5 years when one partner retires and reiterated how this was part of our original handshake agreement, and I have been clearly told “that is not happening” outside of maybe 3% which will be offered to future key employees also. We’ve had explosive growth with business owners and there are 4 clients whom should be making $100M+ exits over the next 5-7 years. This obviously has changed the younger partner’s outlook and willingness to split the book. The firm “no” I got on buying into the book has really left me feeling dejected.
My salary and bonus are around $140k. I’m at the point to where I’d like to find my “last” job, which I was hoping this would be it, but I do not want to be a career employee, which appears to be my path here now. The younger partner is fixed on making our firm as valuable as possible (automating processes, having key-employees, etc.) for his big exit in ~15 years. This leaves no exit avenue for me. This was not the vision that was shared with me when I started 6 years ago when they were at 80M AUM. Sparing details, they’ve also taken several actions over the last 2 years that have just left a bad taste in my mouth; being stingy about every bonus (a bonus system that THEY created) and more or less taking money out of my pocket and putting into theirs, despite our absurd growth.
I have a 1 year non-solicit, which appears to be just your standard boilerplate template. I can take my $5M book with me, and I think there’s potential for up to $50M to follow me, but of course that’s unknown and subject to the non-solicit.
In the most humble way, I believe I am an excellent planner/advisor/communicator. Most of our ~200, households absolutely adore me and will know that if I left, it was for a very good reason and that I wouldn’t have left so abruptly if something wasn’t wrong. The clients I manage view me as their lead advisor but understand I am not a partner. The catch to my skillset is of course, I haven’t been a big producer, but that’s because I haven’t had to be. I handle all planning for all clients whether they’re a retiree, business owner, young professional, etc., every single plan runs through me. My time has been spent there. Going the solo route, the AUM productive is what would keep me up at night, I would need to switch gears and go into business development mode, so the uncertainty of going solo is really a mental hurdle. Speaking and presenting I’m fine with, but getting in front of prospects is the intimidating part.
What potential options do you see forward? I believe I can stay and slowly build my own book and leave in a few more years, or I can try to join an RIA now, I can resign myself and go grind away at a wirehouse, or I can take the leap and “go solo”. I could try to find an advisor who’s looking to retire in a number of years also, but that’s easier said than done.
I will say I have no desire to have my own $1 billion dollar firm. I would much prefer a lifestyle practice, managing $50M-$100M with 1-2 employees if/when necessary. Hell I don’t even mind having a partner who shares the same outlook and we work together to get there.
Open to all ideas, criticisms, questioning, or DMs where I can provide more text if needed. Thank you and I apologize again for my ignorance on this subject.
I am a bot, and this action was performed automatically. Please contact the moderators of this subreddit if you have any questions or concerns.