Keith Somers also had his own planning firm - and many of the same concerns. "I got tired of the headaches of running a business," says Somers, who recently became an advisor with Ameri-prise Financial in Stratford, Conn. "The biggest headache was the overhead, such as renting office space. Then there were the benefits for the staff, such as providing health insurance and matching the 401(k) plan."
Neither Embrey nor Somers has to contend with such issues now that they are both employees. "Much of the stress I felt as a business owner has disappeared by now," Embrey says. "I enjoy spending my days focused on helping as many clients as possible to make the best financial decisions for their families."
UNUSUAL MOVES
The switch to employee from employer is the exception, not the rule, says Bing Waldert, a director at research firm Cerulli Associates. For 2011, for example, only 2.5% of advisors went from independent broker-dealer firms to wirehouses; just 1.7% went to regional broker-dealer firms.
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Still, some planners are finding that being on someone else's payroll has its perks. "Many thought that breakaway brokers were moving on a one-way street," says Waldert, referring to advisors who leave large firms for more independence. Referring to traffic in the other direction, Waldert says "bounce-back" brokers may be returning to firms as employees.
Even planners who have proven they can run a business may simply be getting tired of it. "None of the advisors who have made such a switch recently came to us after just a couple of years on their own," says Pat O'Connell, a senior vice president at Ameriprise. "Generally, they have had their own practice for 10, 15 years or longer."
About 10% of the advisors hired by Ameriprise for its employee channel in the past 12 months were former employers themselves, according to O'Connell. Although he declines to give specific numbers, he says dozens of advisors have made the employer-to-employee switch to Ameriprise.
The main reason for such moves is fatigue. "The advisors who have become employees are looking to simplify their personal and professional lives, yet still serve clients," he says. "They no longer want all the responsibilities of running a practice."
With fewer responsibilities may come greater productivity. Somers estimates the increased support gives him 20% to 30% more time to work with his clients: "I don't have to worry about headaches at the office now."
Somers also sees his recent move as having a longer-term payoff. "The industry is going to change," he says. "Increased regulation will make it harder and harder to have your own practice. I felt that I needed more support, better marketing, a user-friendly website. "
O'Connell says most of the employers-turned-employees at Ameriprise were sole practitioners. "For sole practitioners, it can be a lonely world out there. Some want to be around other financial advisors, which they can do by joining a branch."
Indeed, Embrey says that when she ran her own firm she began to miss having other advisors to help with back-office tasks. "I missed sharing the workload of billing, compliance, research, trading, administration and IT with other professionals in the office," she says. "And I missed being able to devote large parts of my day to financial planning."
When Embrey joined Hamilton last year, she was the company's 31st employee. "I have lots of support now," she says, "so the majority of my day is spent on financial planning. I also get to spend time networking and marketing."
Beyond peer support, succession planning issues can lead an independent to sign on as an employee. "Some advisors have struggled with succession planning in the last few years," Ameriprise's O'Connell says. "We have a sunset program that can help them to realize the equity they have in their practice."
Succession planning was a driving force for Ross Richardson, who is now a planner with Abacus Planning Group in Columbia, S.C. "I made the move from my own small, solo firm, which I had run for about 10 years," he says. "The question of succession planning arose from an SEC visit a few years ago. The examiners brought it up. ... I felt some pressure in that area, but I assumed I would find someone who could take over. Time went on," he continues, "and nothing happened. I was concerned for my clients - who would serve them if I can't?"
