firms. When it was announced that we were going to be acquired, I knew there would be tremendous disruptions from the financial advisor’s perspective, but I was committed to give it a try — to see if I could help make it work. Suffice to say that my worst fears were realized, especially concerning the ‘heavy lift’ imposed upon the advisors themselves — they were asked to go through a tumultuous, disruptive set of changes, with little benefit to them in return. The new model essentially gave inde- pendent financial advisors the freedom to choose what products they sold clients and whether a fee or commis- sion-based structure was best to meet their individual needs. It's a model that often makes more sense for advisors with high net worth clients.
HCOB: How long did it take for you to decide this wasn’t going to work out? Mettelman : I lasted 15 months, and I’d have to say those were the worst 15 months of my entire career. I couldn’t even buy staples without getting approval from somebody in New York or California. That sort of thing. But what was worse, I couldn’t answer questions my advisors had with any level of certainty. I tried to solve their issues, but I couldn’t. I simply didn’t have the authority. That was probably the most disheartening thing — I’d recruited most of these advisors, they were my colleagues, some of them had become my close friends. HCOB: So, what was the breaking point, when you knew you had to make a change? Mettelman : I remember it well — I’ ll never forget it. It was late 1997 — before most people used cell phones — and my home phone rang one night. It was one of our advisors telling me “I don’t think I’m going to stick with this, I’m going to look somewhere else.” I started speaking with other advisors and it turned out a lot of them were also unhappy and considering leaving. I said to myself, “There’s a lot of money here, a lot of opportunity.” And that’s when I and two partners — one a silent partner and the other an actual producing advisor — decided to try to recreate and improve the old firm we had, but under a different structure. This is a relationship business on virtually every other level as well, and our advisor-centric business model relied even more heavily on strong relationships than traditional firms.” “ My wife, Dana, who has an accounting degree from Harbert, was instrumental in handling all of the important stuff — she kept the trains running on time in the early days, ” Mark said. The Mettelmans are pictured with their children, David and Lindsey. (2008 photo.)
HCOB: Can you tell us a little more about the changes imposed upon the financial advisors, and why you felt they were so oner- ous? Mettelman: To begin with, the broker dealers own the relationship with their clients, and those relationships are the most important asset an acquiring company is purchas- ing when the buy a firm. Typically, a client who is being well-served will go with their advisor wherever that advisor goes — provided the cost of making that transition is mini- mal. The problem with most of these acquisitions, however, is that the acquiring firm doesn’t look at it that way. Their focus is on getting access to the advisor’s clients, folding that revenue stream into their own and expanding that revenue stream via the additional products the acquired advisor can now offer. Little attention is paid to the additional work imposed upon the advisor or the impact of the requirement that they sell the company’s products. For example, the process of moving a portfolio of accounts from one firm to another is complicated and time-consuming — for both the advisor and the client. There’s a lot of legal representation paperwork that both sides need to walk through, sign off on — it isn’t a trivial matter. On top of that, the financial ad- visor is typically facing an entirely new and different internal operational landscape. They are moving from a familiar, relatively seamless process in which they control what they do and how they do it to one dictated by the mothership — and that mothership’s processes were not designed with the advisor in mind.
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