Both sides face risks when a private banker moves to an independent wealth manager, but the risks differ.
Independent Wealth Manager: Short-Term Financial Risk 📉
Independent wealth managers face short-term financial risk. Hiring a banker doesn’t guarantee success, and the upfront costs of onboarding and supporting the new hire can be high. Without immediate clients, it’s a gamble.
Private Banker: Career Risk 🚨
For private bankers, the risk hits closer to home. If clients don’t transition with them, their careers could be at stake. Moving away from the structure of a big bank, poor infrastructure in an independent setting can cause long-lasting damage to their reputation. Unlike the wealth manager, the banker risks more than just money—their career is on the line.
Why Deep Research Is Essential
Working with an old companion is tempting, but that’s risky. It’s crucial to dive deeply into the independent wealth manager’s capabilities. You need to understand their business model fully. Does it align with your client’s needs? Can you perform well within their structure? You must know whether the setup gives you the tools and support to succeed.
How to Reduce Risk
Test your clients. Start spreading the benefits of an independent wealth manager with an open architecture platform. This gives clients more flexibility and access to a broader range of products and lets you gauge their interest.
- Don’t just follow a friend. Ensure the firm offers the proper infrastructure.
- Understand their business model. It needs to give you the flexibility to serve clients properly.
- Evaluate the culture—long-term vision matters.
In short, the wealth management firm risks its money, but the private banker risks its career. Doing your homework on the next move is crucial for long-term success.
Source: LinkedIn
