Perhaps it’s the ultimate decision for financial advisors – you’re at that point where you know it’s time to move from your existing firm, but do you take that leap of faith and start your own business or simply jump across to another company?
Finding the right answer may be as much about personal circumstances as it is about a pre-established theory, but Wealth Professional
caught up with three leading Canadian advisors to discuss their experiences: Christopher Dewdney
, principal of Dewdney&Co; Declan Ramsaran, managing director at PANGEA Private Family Offices; and Jim Ruta, president of AdvisorCraft Media and Consulting.
“It was about creating an identity outside of the firm I was associated with - Mutual Life of Canada (now Sun Life),” commented Ruta, who began his own firm back in 1979. He was an agent and manager for almost 25 years and now consults on financial services distribution and advisor coaching.
“We were motivated by independence and the sense of creating something bigger than ourselves, but separate from the company. I still think this is a motivation for others. We also thought we could do the marketing job better than the company was, at least for our younger business clientele. We wanted a classy place that we could have prospects and clients visit and be impressed by what we were, not just what we did. Ego? Probably. But we had the best interests of the client at heart. We wanted to demonstrate that we were independent of the corporate system and would think about our clients first, last and always. The independent office was our way to prove that.”
Thirty seven years may have passed since Ruta started his business – but his motivations of putting the client first ring true for Christopher Dewdney, who has just decided to go it alone after more than 12 years with DWL Financial.
“I was a partner in my previous firm, but I felt it was just going in a different direction compared to what I wanted to be and where I wanted to go with my clients,” he said. “There was maybe some kind of disconnection there between the younger and older members of the team and I felt I could better serve my clients by bringing my own ideas to the forefront. Wealth management is evolving and I want to be part of that story.
“However, I’m a firm believer in starting with a larger firm,” he added. “In my opinion advisors should follow protocol - working in a firm and getting monitored before they get the opportunity to go it alone. They shouldn’t get the opportunity straightaway.”
Declan Ramsaran also believes that experience is vital – he launched his own firm after more than a decade of practical experience within several business lines of the banking and wealth management sector.
“I knew that the calibre of service I wanted to provide under my own brand could only be delivered after many years of preparation,” he said. “Over my 12 year career with one of the big five in both front-line and strategic leadership roles, I had acquired a valuable breadth of understanding of various wealth management operations and a meaningful depth of experience in core HNW & UHNW wealth management models, with best in breed providers.
“I was able to manage my career in a manner that allowed me to successfully acquire the aforementioned experience as well as travel across the country, from Victoria to Moncton and most major cities in-between, giving me a very important perspective of Canadian markets. This national perspective has proven to be a significant area of strength for my own firm.”
So what advice can our trio offer to those who are on the cusp of taking that leap of faith and is it a decision they are satisfied with? For Ruta it was a gamble that led to mixed results.
“The decision was a good one but we did not do enough homework to make it last,” he commented. “The company reneged on their approval of the idea even though they now encourage the idea. That caused serious trouble.
“We were ahead of our time by about 15 years, at least in Winnipeg. It was a little early to do what we wanted to do. The company had little experience managing people like us and I sense we worried them. Ultimately we wound it up and returned to the branch - but not because it didn’t work. It’s fair to say that we overestimated our ability to generate revenue and underestimated the amount it would cost to operate.
“Still, I would do it again because you learn things about being in business from actually running a business on your own - things you could never learn otherwise. The experience, even though it was not successful, helped me many times, with many agents I worked with and on my own as a coach. It was worth all the trouble, especially in retrospect.”
For Ramsaran the decision has definitely proven a success – so what advice can he give?
“I’d say consider establishing your own firm if you can meaningfully serve a defined client segment by offering noticeably more value than their existing options,” he said. “Think about if you can contribute significantly to the profession through innovation and differentiated thought leadership, and, most of all, think about if you believe that you can remain true to your vision both in times of crushing adversity and stellar success.”
As for Dewdney, he is just at the start of this next stage in his personal journey but it is one he has a vast amount of enthusiasm for despite the initial challenges.
“There’s no doubt that running your own firm is difficult,” he said. “There are a lot of things you simply might not think about when you’re working as part of a bigger company that suddenly you need to take care of. From managing staff to putting extra time into the practice, there are a lot of peripheral issues you need to think about.
“Ultimately though, this is a profession that’s entrepreneurial in nature. I like the freedom of being in front of different clients and I think if you have the opportunity it’s hard to turn it down. I enjoy it – and I certainly have no regrets.”