WealthManagement Magazine

Planning a Safe Journey to Life at a New Firm

This month, many of us will think that it's time for a fresh start, like a new job then quickly forget about it because we're afraid of all that's involved in making the switch. Brokers have more to worry about than other employees because they work in highly competitive and regulated business. But if they prepare themselves well, the transition from one firm to another can be a great career move.

This month, many of us will think that it's time for a fresh start, like a new job — then quickly forget about it because we're afraid of all that's involved in making the switch. Brokers have more to worry about than other employees because they work in highly competitive and regulated business. But if they prepare themselves well, the transition from one firm to another can be a great career move.

Legal Advice

Before the actual transition process begins, your new firm's lawyers and management will help you develop a transition strategy and anticipate any issues that could occur when you resign from your old firm. Nevertheless, it is not the new firm's responsibility to advise you on matters involving your old contract. Consult your own attorney on this. Your lawyer should be your advocate to look at your existing contract and guide you in the realities of what it will take to extricate yourself.

Office Space

The new firm must begin to install technology and telecommunications equipment and order office supplies, business cards, stationary, furniture, etc. — everything must be ready prior to your move. The presumption here is that you should have a completely functioning office on the day you move, even though nothing can be distributed with the name of your new firm until you have resigned from your present one and your license has been transferred.

Client Records

You must photocopy all client records — no originals may be taken — that you believe are necessary to bring with you to the new firm. Also, arrange for your new firm to have a letter drafted for each of your client accounts and a package prepared containing new account applications, ACAT forms and the requisite paperwork (i.e., margin agreements, W-9 forms, option agreements, IRA applications, etc.) with a return envelope. Your new firm may not send out these packets until your license has cleared (if clean, it will probably happen the same day).

Sales Support

Typically, the new firm will assign sales support to work with your present staff to deal with the transition, including the preparation of client ACAT packages. The work of your current staff should be done out of the office. Schedule it for after hours, during weekends or vacation times. Plan to pay your support staff personally to assist you because if your present firm learns that they have been paying your staff to assist you, your liability could be greatly increased.

New Firm Paperwork

You will want to fill out all necessary paperwork for the new firm prior to your day of resignation so that you are immediately available to talk with your clients after you have resigned.

Physical Move

The night before you resign from your present firm is the time to clean out your desk and move your belongings.

Resignation

Resign in writing to your supervisor late on a Friday morning, then call the manager at your new firm and let him know that it's time to have your licenses transferred. Following this schedule will enable the transfer to take place that day.

During the afternoon, start contacting your clients. Tell them that they will be sent a package of information that you would like them to fill out and send back as soon as possible. See you're “A” clients personally to get the appropriate documents signed immediately. It is imperative that your clients learn of your move from you, not from another broker at your old firm who will work hard to convince them to leave you and ruin what was an otherwise successful transition.

Writer's BIO: Mindy Diamond founded Chester, N.J.-based Diamond Consultants, which specializes in retail brokerage and banking recruiting. www.diamondrecruiter.com

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