Is It Too Late To Move In 2024?
Read the full article/transcript at 3xEquity.com. As the year draws to a close, financial advisors contemplating a switch to a new broker-dealer are likely asking themselves one pressing question: is there enough time to make the move before the end of 2024? Transitioning to a new broker-dealer can be a complex and time-consuming process, involving everything from due diligence to the actual transfer of accounts. With the year-end deadline looming, it’s crucial to weigh the benefits and challenges of making this transition now versus waiting until 2025. Here’s what you need to consider. The short answer is yes, but with only a few months left in the year, the window is rapidly closing. A transition can take anywhere from six weeks on the very rushed end to a few years for larger practices. Timing depends on many factors, including the complexity of your practice and the level of support you receive. However, motivation can play a significant role in expediting the process. If you’re determined to move before the new year, there may be some compelling reasons to do so—not the least of which is keeping tax year records cleaner. Switching broker-dealers isn’t something that happens overnight. On average, a transition can take anywhere from three to six months, depending on various factors such as the complexity of your book of business, the level of support provided by your new broker-dealer, and regulatory requirements. The first step in any broker-dealer transition is conducting thorough due diligence. This phase typically involves researching potential new firms, comparing their platforms, fees, compliance support, technology offerings, and overall culture. It’s also essential to speak with other advisors who have made similar transitions to gather insights and recommendations. This process alone can take one to two months, especially if you’re considering multiple firms. Once you’ve selected a potential new broker-dealer, the next phase involves negotiating your contract and reviewing the fine print. This stage is critical, as it ensures that the terms of your new affiliation align with your business goals and client needs. Legal review of contracts, negotiating terms, and finalizing agreements can easily take another month or two, depending on the complexity of the deal and the responsiveness of both parties. Having a consultant on your side who sees 100’s of deals each year and can offer you guidance on how to increase your package is critical. As we turn the page on summer 2024 and set our sights on fall and winter, the question of whether to move now or wait until the new year becomes more frequent. Aligning your transition with the new year offers several benefits: Many broker-dealers are offering outsized packages for top talent as the year draws to a close. If you start now, you could take advantage of these competitive offers, which might include significant signing bonuses, higher payouts, or other financial benefits that might not be available in the new year. Additionally, year-end bonuses will soon come into play, meaning you might have timed this perfectly. If your current broker-dealer relationship is hindering your ability to grow your practice or serve your clients effectively, delaying the move could mean another year of missed opportunities. Transitioning now could position you to hit the ground running in 2025 with a broker-dealer that better supports your strategic goals. One practical reason to consider moving before the new year is to keep your tax year records cleaner. By aligning the transition with the calendar year, you can avoid complications that might arise from splitting financial records across different broker-dealers within the same tax year. With just a few months left in 2024, here are some practical steps to consider if you’re determined to make the move before the end of the year: Reach out to a transition consultant, such as 3xEquity, to begin discuss
