Over the past five years, more than 800 advisors have left wirehouses or broker-dealers to join registered investment advisors (RIAs), according to Financial Planning — despite the demanding work, stress, and uncertainty of not knowing whether their clients will follow. So, why do they do this?
“It’s generally rare that someone just wants to do it for the money,” says Kilpatrick Townsend attorney Paul Foley in the Financial Planning article. “There’s a broader scope of issues.”
Some of these issues? Corporate bureaucracy, a bad manager, larger firms shunting an advisor’s smaller clients to call centers, lack of opportunities for growth…
We both faced some of these issues when we worked for larger firms, and it’s why we started our own solo firms — and then later launched Equita Financial Network to help other female financial planners do the same.
If you’re on the fence of whether or not you should leave your firm environment, we include four warning signs below:
1. You’re not being paid what you’re worth.
Female financial advisors have the widest wage gap of all occupations tracked by the U.S. Department of Labor, reports Financial Planning in a 2018 article. Female advisors earned just 59 cents for every dollar their male peers earned in 2017. Why is this? Unfair treatment, accounts being passed down to male advisors, and barriers during networking are just a few of the reasons.
By branching out on your own, you can have more control over how much you make. Seven in 10 advisors report making more money after they moved to the independent channel, the 2018 Charles Schwab Independent Advisor Sophomore Study found.
2. You’re not able to do right by your clients, and you feel constrained.
Going independent gives you the freedom and opportunity to truly put your clients’ interests first. In the Charles Schwab study, 94 percent of the polltakers said they went independent because they wanted to do what was right for their clients; 73 percent said they wanted to build better, longer-term relationships with clients.
And going independent has been paying off: advisors from the study said they have kept an average of 87 percent of their clients after making the transition.
3. You have no flexibility between work and life.
Work-life balance can feel nearly impossible in the financial services world. It also doesn’t help that, “the disproportionate responsibility of raising young children that falls to women often causes them to drop out of the workforce if they don’t get the right support,” as Barrons puts it.
Both Bridget and I can speak from personal experience about not finding work-life balance at larger firms during our careers.
Here’s one example: When my nanny called in sick after my first son was born, my husband and I tried our best to cover our work responsibilities and childcare until she could return. When I went back to work, my supervisor told me that I needed to find a contingency plan for childcare if my nanny couldn’t make it, and that “plan” couldn’t be me.
At that particular moment in my life, I needed flexibility — I needed to work for a firm that was able to understand my needs as a new mom. Owning my business allows me to be both present as a mom and present with my business and clients. Yes, I work long days, and early mornings, and late nights, and usually on the weekends when the kids are napping — but I love that I can have my career and still be present in their lives.
4. It’s a toxic work culture.
If you dread going to work every day, if you feel constant anxiety during meetings, if you’ve given up trying to voice your opinion because you know it will be quickly dismissed — know that there’s nothing wrong with you. It’s your toxic workplace culture. According to SHRM, 58 percent of employees who quit a job due to workplace culture say that their managers are the main reason they ultimately left — and the cost of this turnover has been $223 billion in the past five years.
The same Charles Schwab survey I mentioned above found that of the financial advisors who made the leap to independence, 90 percent said they have no regrets and would make the same decision all over again. Those same survey respondents said they are happier now that they are independent, and they have made more money since going independent.
Do you face these four issues? Then it may be time to carve out your own path. Starting your own firm comes with emotional and financial challenges, but it’s worth it, as studies have shown.
Equita Financial Network provides the support, network, and resources needed to run your own firm — and research has proven that women who support each other are more successful. I’ll leave you with a quote from Shelley Zalis, who wrote an incredible article on the power of collaboration between women earlier this year:
“Women trying to rise up into leadership face cultural and systemic hurdles that make it harder for them to advance, such as unconscious bias. [According to Harvard Business Review,] a way to overcome some of these hurdles is to form close connections with other women, who can share experiences from women who have been there, done that — from how to ask for what you’re worth to bringing your unique talents to leadership.”
We couldn’t agree more. If you’d like to join our tribe of supportive, smart female financial planners, contact us today.