Tips for Financial Advisors Navigating the Transition Process

Transition to Independence with Confidence

Leaving the wirehouse or switching wealth management firms is a big decision for advisors. A successful transition could give you more control and flexibility over your financial practice, and even potentially improve your payout and fee structure.

But like any change, transitioning your book of business can be daunting. You might be asking yourself questions like: What if I lose clients or revenue during the transition process? How do I make sure I’m in compliance with my current firm’s resignation and transition policies? How will I juggle all the details and make sure I’m not losing sight of key steps?

David Miller, LUTCF, president and managing director of RFS Financial Services faced these concerns when he was preparing to move his business. “I was super nervous about the process — we had 800 accounts. How do you manage that?”

David discovered that moving is a lot easier when you have the right partner by your side.

You can transition your business with confidence, too. Use this financial advisor transition checklist to help you evaluate independent wealth management firms and find the right fit for your needs.

Questions to Ask Your New Firm

Developing a transition plan is like preparing a financial plan or investment strategy for your clients. Spend the same amount of time, if not more, to:

• Determine what success looks like for you and your clients.
• Document critical milestones and the unique needs of your business, staff, and client base.
• Outline what you can or can’t do to prepare for the transition, in alignment with what you’ve discussed with legal counsel, especially regarding collecting and organizing client data.

The more your plan reflects the unique aspects and needs of your business, the more successful you’ll be in aligning expectations with your new firm. Here are some important questions to ask regarding their transition process:

1. How will my existing clients be impacted during the transition, and what will your firm do to help minimize that impact?
2. How long does the typical onboarding process take?
3. What percentage of my client accounts should I expect to transition with me in that amount of time?
4. How will you ensure that I’m up to speed on your firm’s technology, platforms, and rules and regulations?
5. Does your technology platform integrate with popular third-party applications?
6. How many systems do I have to log into to transact business?
7. Tell me about your financial advisor transition services. Will you support me before, during, and after the onboarding process? If so, how?
8. Do you offer financial advisors transition packages?

Learn how LPL Financial is solving advisors’ top transition concerns. 

Navigating the Planning Process

There’s a lot that falls under “planning” but getting organized in general is a good place to start. Now is the time to:

• Determine your resignation date.
• Create a timeline.
• Organize and update your current client list.
• Share the news with your continuing team members.

The right firm will be there to help you address each of these items. That’s why it’s important to choose one that offers:

• A team to guide you through transitioning with precision and clarity and provides a customized roadmap — and a menu of contacts and resources — so you can get back to running your practice as quickly as possible.
• Knowledgeable professionals to analyze your business and evaluate your strengths, while helping limit risk and find opportunities for future success before and after onboarding.

Navigating Legal Issues and Evolving Regulations

The legal aspects of changing firms can vary, especially if you’re moving to a new business structure or model. Engaging legal counsel is essential to help ensure you fully understand all your agreements with your current employer (including any non-compete or non-solicitation clauses), privacy considerations for client information, and how to prepare and execute all required legal documentation and regulatory filings.

You’ll need to:

• Have a plan to update and transfer relevant licenses.
• Determine what client data you can legally access and utilize if under Broker Protocol regulations.
• Be up to speed on any regulatory updates or changes regarding transitions.

Again, the right partner will be there to help you address each of these items. That’s why it’s important to choose a firm that offers:

• Compliance services to ensure you remain legally compliant with regulations without losing extra time and finances in the process. Your new firm should make your compliance a priority through training, expert knowledge, assistance, and automated processes, tools and technology.
• Education through training and learning experiences that ensure that your practice evolves and grows with changes in technology, trends, markets, regulation, and client expectations.

Navigating Client Conversations and Relationships

Your clients will likely have questions about how the move will affect their communication with you, their investments, and their costs. Consider using these best practices to keep them informed and at ease during the transition process:

• Be honest and upfront about the change and why it’s happening.
• Explain how the change benefits or impacts them.
• Set expectations and communicate frequently as new information arises. Let them know that you’ll provide more information frequently over the coming weeks or months, and then stick to a consistent schedule to ensure that not too much time goes by without any touchpoints.
• Meet with top clients and listen to their concerns. No matter how frequently you communicate or how proactive you are, some clients will want to meet with you or ask additional questions. In times of change, carving out extra time for in-person, phone, and video calls is vital.
• Use a variety of communication channels to keep clients in the loop. Consistent, clear communication is pivotal during a major change, so consider using your website to post blogs and video updates, send weekly newsletters or emails, meet with clients when necessary, and leverage other approved forms of communication like social media to get your messages across.

Keep in mind that your clients will experience the same support that you and your team receive. That’s why it’s important to choose a firm that offers:

• Platforms that provide access to a variety of solutions for your clients’ investment goals with a broad array of options, and the service and tools to use them efficiently.
• Service and support to clear hurdles that arise during the onboarding process. With an efficient and specialized team of service professionals, you can keep your clients informed and confident at every step.

With LPL Financial, Business Transitions Offer Opportunities

There’s a lot to consider and execute when you’re transitioning your practice. At LPL, you’ll have support at every step. Our transition specialists combine their extensive knowledge of LPL’s spectrum of independent affiliation models with industry best practices to make your transition as smooth as possible. Contact us to learn how we can help ease your mind about the transition process and position you for success at LPL.