It is unsurprising when a registered investment advisor (RIA) chooses to part ways with a firm where his or her career has stalled or just not risen to desired heights. What is surprising to many in the investment community is that many RIAs are now breaking away from firms where they have seen unprecedented success.
When change is worth the trouble
Career changes in the investment world come with so much work, trouble and risk that the reasons behind them must be compelling. Some of the key reasons today’s RIAs are choosing to leave, even in favorable conditions, include:
- Concerns over client well-being: An RIA’s legal obligations are to his or her clients, first and foremost. If your current environment is holding you back in any way from placing your clients’ interests in the forefront, it may be time to part ways.
- A desire for leadership: Many RIAs choose to break away because they have a vision for the success of an investment firm, but are not in a position to bring that vision to fruition. By establishing their own firms, these professionals can become the leaders that are needed to enact structural change.
- Opportunities in niche areas: Some advisors are leaving because the less flexible rules of their employers disallow them from providing certain services or working with specific sets of investors. By starting their own firms, they can explore these opportunities free from in-house rules that have constricted them in the past.
Any career change comes with risk, but RIAs can mitigate that risk by consulting with an attorney who understands their profession and the investment world in which they operate. From reviewing employment contracts to assisting in the start-up of new firms, a skilled lawyer can help you fully realize the advantages of breaking apart from the old and stepping into the new.