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Streamline Your Search for New Office Space

September 29, 2016

For financial advisors considering a move to independence, the opportunity poses appealing and exhilarating possibilities: a greater range of resources for clients, less bureaucratic red tape, more control over structure, compensation, and succession planning, and the chance to unleash one’s entrepreneurial spirit.

And then there’s the question of office space.

Have I lost you there?

For many financial advisors, the idea of securing new office space is daunting. Coming from a wirehouse or bank, they are accustomed to Class A office space. The task of finding an equivalent — or better — environment can be intimidating.

However, like every component in the move to independence, best practices can guide the transition and smooth the process. In the same way that financial advisors gain skill by tackling complex initiatives over and over again — think of a liquidity event or a concentrated stock sale — so too the transition team at Dynasty Financial Partners has identified its own set of best practices for securing new office space.

By following these precepts and weighing the advice of seasoned advisor teams who have made their own transitions, advisors can better understand, manage, and streamline their quest for a great home for their new business.

Step 1: Pin down your vision

Every financial advisor knows the importance of goals in guiding sound decisions. With real estate, goals are just as important. Developing a clear list of “must haves” and “nice-to-haves” can help clarify the parameters of where and when you make your move.

The first priority, of course, is client comfort. Advisors should secure a space that is convenient and appealing to their core constituency, factoring in considerations such as availability of parking, traffic, physical accessibility, privacy, and surrounding amenities, such as shopping and dining.

Advisors also want to find a space that aligns with their brand and is a fitting extension of their practice. Here too, client engagement drives the decision. If an advisor caters primarily to tech entrepreneurs, his physical environment may be more in keeping with a warehouse layout than a traditionally walled office. Similarly, an advisor who leads frequent family meetings may strive to generate a more relaxed and collaborative environment, eschewing a traditional conference room for a more personalized and intimate space.

Finally, advisors should not forget about their own well-being and that of their staff. Commuting distances are important to quality of life and the ability to retain top-tier talent. Moreover, staff members will likely have their own wish-list for the new office, from natural lighting to windows that open.

Given the length of time people spend at the office, team happiness is essential to the overall success of the venture.

Step 2: Assess your options and financial commitment

Advisors have three primary options for their new space: (1) They can engage in a long-term lease for a customized build-out; (2) They can use temporary office space at launch, cushioning their timeline to move to permanent space as their business progresses; (3) They can sub-lease space that is business-ready. Each of these options has its own appeal.

Permanent space is often psychologically attractive to advisors. They want to find their new home, design it to their parameters, settle in, and get rolling. However, the up-front financial commitment is substantial. Advisors have to provide a significant deposit, commit to a lease, and invest in furniture and fittings.

Temporary office space can prove to be a good solution. A number of firms now offer professional spaces for short engagements. Pre-wired, furnished, and often staffed by a receptionist, temporary space offers a polished feel without an outsized financial commitment.

Such spaces allow advisors to launch their new businesses, assess their financial outlook more clearly, and proceed with securing permanent space in a more relaxed fashion. The spaces are not branded and typically include shared public areas, such as conference rooms and kitchens. These communal features, however, are rarely “deal-breakers,” given the financial flexibility they provide.

A third and final option is the proverbial unicorn: subleasing. This option can provide the branding and settled feeling that advisors crave at an appealing price and commitment level. The trick, however, is finding the right opportunity. In hot real estate markets subleases are snatched quickly, and one firm’s misfortune is another’s bounty. Advisors should scour their target area for sublease opportunities while weighing their options for permanent and temporary spaces.

Step 3: Work out your timeline

Each of the three options — temporary, permanent, and sublease — has a characteristic timeline. Finding permanent space, negotiating the lease, securing permits, and building out a finished office can typically take between six to 10 months. Subleasing has a more compressed timeline — typically two months. And temporary office space is the most expedient of all, often finalized within a week, if necessary.

Step 4: Partner with the right resources

Finding new office space is a process with many moving parts. It’s important to lean on a group of experts who can facilitate a smooth and timely transition. “On-the-ground” experts can provide a level of day-to-day oversight that frees advisors to focus on other aspects of their launch.

Given the sensitivity of a move, many advisors rely heavily on family members or friends to be their proxy for decision-making. Some advisors have never set foot in their space before launch, coordinating all decisions remotely.

Step 5: Take a deep breath

Advisors often relate that it’s important that their space project a professional image from day one. They’re eager to reassure clients that every aspect of their transition has been well planned and well executed.

I understand and applaud this mindset, but I remind advisors that clients are often far more understanding of transitions than they might anticipate.

Financial advisors typically advise entrepreneurs and business owners who have undergone similar moves — and they of all people understand that growth often involves change.