- On April 3, 2017
Many of the wirehouse advisors we work with in exploring their recruiting options ask how their deferred comp is taken care of. Will it be fully or partially replaced or will they need to leave it behind.
Do you have significant deferred comp built up that is causing you to hesitate in considering your recruiting options elsewhere, or are currently trying to negotiate a recruiting deal with a prospective new firm? Think about keeping perspective as you evaluate replacement options.
- Deferred compensation programs are adventitious for the advisor and the firm, but it is important for advisors to keep their deferred comp in context when considering other recruiting options.
- While deferred comp programs helps firms streamline their cash flow, it is primarily used as a retention tool. Deferred comp is a way to handcuff you (and not in a good way) into staying when you would rather leave.
- Wirehouses offer the deferred comp carrot for you to collect in 5 to 10 years so you are less likely to leave when they reduce your payout each year, charge you for additional state licensing, underpay your sales assistant inferring that you pick up that additional obligation, add fees to your clients expecting you to explain the added benefit to them, etc., etc. These are likely just a few of the “push factors” that have probably caused you to seek a better opportunity elsewhere.
- While no advisor wants to leave money on the table when they leave one firm to join another, and, after all, you’ve earned it by achieving all but one of the hurdles; the truth of the matter is that the sum of the benefits of what you gain in a transition should far exceed what you may leave behind.
If your deferred comp is all that is keeping you at your firm then is that really the firm you should be at?
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