Over the last two years there has been a staggering number of divorces / breakups among investment advisor teams that had been together for years. What happened? What do you think? If your team broke up, why do you think it happened?
Among the most common reasons given has been the division of money during and following the "Black Swan" that devastated the financial markets recently. During the bloodbath, major firms went into a feeding frenzy trying to lure successful advisors and advisor teams to move under their roof. In the process, they spent billions of dollars to "buy" the assets these individuals and teams could bring to the table. At the same time, to stop the hemorrhaging of their own managed assets, firms began to offer substantial financial bonuses to their best advisors and teams to stay.
So, what's the big deal? In a down market, with falling fee and investment income, a big check can look pretty good. For many teams, the problem arose when it came time to 1) decide whether to stay or go, and / or 2) how the spoils were to be divided.
You may be tempted to lay it all on simple greed and, for a few, that was probably the case. However, the question is more complex and involves a variety of factors from the pros and cons of moving to a new firm vs. staying with the current employer to how each person on the team felt valued by the others on the team and how well that was communicated.
Over the next few postings, we'll be discussing just that and ways to avoid expensive breakups because, lets face it, divorce is ALWAYS expensive, whether its a marriage or a team. What do you think? Thanks. kfg
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The movie Tobey Maquire perhaps said it best with the memorable line "show me the money!". Communicate all you want but in the end "show me the money" is the theme in American Business, typified by the loss of much of the manufacturing base of the United States, the short term management approaches of Corporate leadership, and the unwillingness of American workers to adapt to a changing world dynamic.
ReplyDeleteBest wishes on the blog