How Would You ReDraft?
We all know that we can’t change the past and we all know that we still fantasize about it anyway.
With the NFL draft set to take place soon, I started thinking about past drafts. Some super-hyped players turned out to be duds and some who flew under the radar and were drafted in late rounds, have won multiple Super Bowls.
NFL teams can’t go back in time and change their draft picks, and we can’t go back and change our choices. But we can make new choices and changes.
Finding Value
The goal for a team at the NFL draft is to find value. A first-round pick can make you a lot of money but they’re going to cost you a lot of money too.
The value is not to be found in the first round but in the later rounds, that’s where teams can get the biggest returns on their investments.
We know that hype doesn’t always translate into worth.
Take Ryan Leaf, for example, hyped far and wide. He was the #2 pick in 1998, signed by the San Diego Chargers. He played just 3 seasons in the NFL, starting 21 games. At the end of his career, he was 4-17 and his career passer rating was 50. He threw more interceptions than touchdowns, 36 to 14. Leaf is widely considered one of the worst picks in NFL draft history.
Let’s compare Leaf to the pick considered the greatest in NFL draft history.
You probably guessed it, Tom Brady. Brady was drafted in the 6th round of the 2000 draft, 199th overall by the New England Patriots. He started 283 games for the Pats, has been selected to 14 Pro Bowls, and of course, won six Super Bowls. Brady is widely considered to be the best pick in NFL draft history.
Free Agency
Drafted players don’t get to pick their team. For the most part, they sign with the team that drafted them. This is pretty unique to sports.
The rest of us do get to choose who we work for. But if you had to choose again, would you make the same choice? Are you happy where you are?
If you’re affiliated with a private equity-owned broker-dealer, the answer may be “No.”
The PE firms and the owners of the broker-dealers are making a lot of money, but the advisors aren’t making anything and have to put up with all kinds of disruption.
As a result, a lot of advisors are looking to go independent.
Becoming a free agent allows an athlete to choose who they work for and gives them more control over their career. Becoming independent is the equivalent for an advisor. But becoming independent comes with its own challenges.
Advisors are concerned about working without the infrastructure that working for a broker-dealer provided, administrative support, access to technology, compliance support being important considerations.
Recent research from Cerulli Associates revealed that nearly half of advisors considering becoming independent would prefer to join an existing independent firm rather than start their own.
If it’s been a long time since you’ve considered becoming independent, a lot has changed. You can access the support and services that your broker-dealer offered while controlling your own destiny.
All Teams Aren’t Equal
If you could redraft your hybrid RIA partner, would you? Or would you make a different pick?
Whether you’re not yet independent and looking become so…
Or you’re unhappy with the arrangement you’re currently in and looking to change it…
Remember that all teams are not created equal. They don’t all offer the same support, services, and culture.
But how do you know until you’re drafted? You need to talk to someone that knows the players. I help advisors cut through the sales pitch and get concrete answers to questions about:
Compliance oversight
Portfolio Options
Business models
Transitions and onboarding
Technology
Advisor services
Access to experts
With a veteran advisor advocate in your corner, you can transition faster and with more confidence in the team you choose.
