Finding the right office space for your new firm can be a daunting task, especially for a financial advisor whose experience with real estate may be limited to buying a house.
Darian Johnson, CEO of TruClarity and a 30-year veteran of business incubator and finance industries, says advisors looking to make the break to independence should leave tasks like finding an office to the pros. Johnson is TruClarity’s in-house real estate expert.
Johnson says TruClarity project-manages the opening of a new office for an advisor or team of advisors who are going independent.
“There are literally dozens and dozens of decisions to make, and these are decisions that have to be made during the day,” Johnson says. “A financial advisor working at a wirehouse and intending to go independent would have to deal with brokers, landlords, contractors, designers and others to choose, prepare and furnish the space, and implement the technology components, during the workday on time they do not have.”
He said clients often report micromanagers who routinely check to ensure their calendars are packed from morning to late afternoon. “There is no free time in a wirehouse,” he says.
He offers the following three things to consider when selecting your independent firm’s office space:
- Location: Most advisors desire to be in an area close to their clients or close to home. Ideally, those two would intersect. Whether advisors choose an office complex or a high-rise building, it needs to be easy for clients to find. The office also will need sufficient parking for clients who are visiting the office.
- Space: Once you determine how many offices, conference spaces, etc., that you will need, an experienced real estate person can help you find an adequate and available space, preferably with minimal build-out required. Generally, financial advisors are looking in the 1,500- to 3,500-square-feet range. TruClarity works with commercial real estate brokers in the desired market to find available and appropriate spaces. They give the financial advisor the best options so they can choose what they want, and then TruClarity will begin to negotiate a lease. “Unless a building has adjacent space that you could move into relatively easily – and that does not happen often – you are going to live with the space you lease for about five years, with usually two five-year options after that. You do not want to have to move too soon,” Johnson says.
- Time: A minimal buildout will be two months and something more complicated could stretch to six months. “Ideally, you just want to paint, change the carpet and ceiling tiles, or move a wall or door,” Johnson says. “It is best to avoid anything too complicated or time-consuming. If you are doing any electrical or plumbing work, it would require a permit from the local municipality and a much longer timetable.”
Make sure you allow yourself the necessary time or you may find yourself working out of temporary space with just a cellphone, Johnson warns. “Ideally, you want to leave your wirehouse job one afternoon and start calling your clients the next morning from your furnished, fully operational new office. It is essentially impossible to do this overnight.”