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Advisors: 8 Steps to Take Before Moving Firms


Advisors: 8 Steps to Take Before Moving Firms

The next chapter in your career can be easily derailed by not having a concise and deliberate plan in place well before your move date

After months of performing thorough due diligence, you’ve finally decided to pull the trigger and make a move. You may even have a start date on the calendar. Now what?

While you may feel that you’ve covered all of your bases, there are steps that every advisor should take to ensure your transition goes smoothly. Moving to a new firm requires a degree of preparedness and should be well thought-out. In fact, we often recommend that advisors begin preparing for their transition three months before their anticipated move date.

While the firm you are joining will define much of the onboarding and transition process, here are the steps we recommend an advisor follow before moving.

  1. Hire an attorney: We cannot stress this enough! Once you’ve committed to making a move, it’s imperative that you retain an attorney who specializes in advisor transition, as there are rules and regulations specific to the brokerage business that only a specialist will be familiar with. Your attorney will review both existing and new employment contracts, and will guide you through the terms of the Protocol prior to departure day. It’s essential that you understand the legal ramifications associated with a move in general, and are clear on best practices and issues to consider when moving to a new firm or even going independent. While most prospective firms will require that you speak with their internal counsel, keep in mind that by retaining your own attorney you’ll have someone working as your personal advocate as well.
  2. Identify a team leader: The larger and more complicated your business is, the more balls there will be to juggle. As you prepare to make a transition, assigning a project manager, often a more junior partner, will alleviate confusion and ensure that everything runs smoothly.
  3. Evaluate your book client-by-client: Every advisor worries whether their clients will follow them. Keep in mind that not only do most firms have the onboarding and transition process down to a science, but the Broker Protocol has been a game changer for the financial services industry as it provides a clear and well-defined path for making a move. Nonetheless, if you’re concerned about who will come and who won’t, take the time to evaluate your book client-by-client. Begin by evaluating the genesis of each relationship (was the client self-generated or did you inherit the client by way of a retiring or departing advisor), then break your business down into 3 categories:

    1. Clients who you have deep relationships with and are confident will follow you.
    2. Clients who you believe will follow you, but are not 100% certain—perhaps the relationship is somewhat new and you’re still cultivating it.
    3. Clients who you feel are up for grabs as they may have a stronger relationship with the firm than with you. If you don’t believe that the majority of your business is portable, then staying put may be the best option.
  4. Meet with your clients: Prior to your move date, schedule as many meetings with your clients as possible and take this opportunity to solidify your relationships. As a fiduciary of your current firm, you’re restricted from soliciting clients to move with you and you should resist the urge to say anything about your impending move. You can, however, use this opportunity to gauge client loyalty and assess your current service model. Ultimately, confer with your attorney prior to having these conversations, as he or she will guide you on what you can and can’t say.
  5. Write your elevator pitch and prepare a client communication strategy: Begin by understanding and defining the benefits of a move from your client’s perspective. How will you articulate the value of a new firm? Communicating a thoughtful message to clients during a transition is critical in order to optimize asset retention and ensure a successful move overall.
  6. Develop marketing materials: How will you market yourself at your new firm and what materials will accompany your client information packets? Work with your prospective firm to create these materials as this is part of what they bring to the equation.
  7. Create account paperwork: Client documentation is perhaps the most important piece of any transition. Prior to moving, advisors will work with a transition consultant who will guide them on compiling allowable information. A well-organized and executed move will result in an unobstructed path to success.
  8. Keep things quiet and don’t do anything out of the ordinary: While it may be tempting to begin downloading or copying client information, be forewarned that your firm’s compliance department will likely take notice. Lastly, keep in mind the World War II expression, “Loose lips sink ships.” Making a move can be invigorating and exciting, but refrain from telling even your mother. It’s amazing how word can spread and those outside of the financial services industry don’t understand the nuances of the business and the risks of breaking the news prior to your resignation.

This next chapter in your career is an exciting one, but certainly fraught with plenty of details and considerations. Taking the time to get your ducks in a row before charging ahead will ensure the next steps you take will pave the way for a smooth and prosperous path forward for you and your clients.

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