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Five Steps to Retaining Clients During a Move

After spending a professional lifetime building and nurturing relationships, the last thing an advisor wants is to lose ground.

Advisors who are considering a move often lie awake at night asking themselves:

“Will my clients follow me?”
“How deep are my relationships?”
“Do I have the confidence to test their loyalty to me?”
“Do I want ALL of my clients to follow, or is this a good time to clean house?”

Certainly, these are important questions to ponder. After spending a professional lifetime building and nurturing relationships, the last thing an advisor wants is to lose ground—especially since the motivation for any move should be to improve the client service model and accelerate growth.

So, how should someone in exploration mode assess the potential results of a move to another firm? Consider these five steps:

  1. Objectively evaluate your book client-by-client. Break it down into three lists: As, Bs and Cs. As are for the ones that you know are yours for life. Bs are the questionable ones—they’re likely to follow you anywhere, but you’re not 100 percent sure. Cs are definitively up for grabs. If the As don’t far outweigh the Bs and Cs, then perhaps staying put is your best bet.
  2. Evaluate the genesis of each relationship. Was a client inherited and, therefore, not really “yours,” or was that relationship self-generated? How “sticky” are the assets to your firm/bank?
  3. Create your elevator pitch. Imagine that you have made the move to a new firm, and you now need to tell your clients why they should follow you. What would you say? What’s in it for them? Does the new firm’s value proposition sound like one that your clients could legitimately embrace?
  4. Would you be OK with the loss of some clients? In every move that I have ever facilitated, there has been at least a small amount of “slippage.” Can you live with that? Do you believe that this new opportunity will allow you to do better work for your clients overall and grow faster? If so, does the upside outweigh the potential downside?
  5. Are you considering a move for the right reasons? No doubt, personal financial gain, both short- and long-term, is a great motivator. But unless you are certain that, at the heart of it, you are moving with your clients’ best interests in mind, I believe you are better off staying put.

While every advisor who has ever changed firms admits to feeling apprehensive about client portability, most quality advisors who change firms for the right reasons move the overwhelming majority of their assets within the first two months, and generally hit 100 percent of their recruited assets by the ninth month. Broker Protocol, the seminal document that allows an advisor to move from a brokerage with impunity as long as they don't violate it, has been the real game-changer. Plus, almost every quality firm has a dedicated transition team that has transformed the process from art to science. And we have seen advisors breaking away from the traditional space and going independent who have transitioned all of their assets within six months.

Changing firms is most often viewed as an opportunity for reinvention and, as such, a chance to pare one’s book and jettison client relationships that are less profitable, productive or emotionally fulfilling. Still, plenty of folks are held captive by the worry that their clients are theirs only because of their association with their current firm. In many cases, advisors sell themselves short when they allow fear to rule them—especially when the potential upside could far outweigh any loss.

What’s Best for the Clients

While many advisors feel frustrated with their current firm, the fear of making a move and losing their clients is even more troubling. Take Meredith, for example. A wirehouse advisor generating $4 million in annual revenue, with $600 million in assets under management, she was looking to move from one major firm to another. She described her mounting concerns with the changing culture and what seemed to be a “revolving door” of local management—both hampering her ability to serve her clients and grow her business.

Meredith felt the time was right to make a move and monetize her business, but she was worried about client portability. As part of a thorough due diligence process, she spent a lot of time with local, complex and senior management at the new firm. They provided the input she needed to put her mind at ease, and ultimately, to convince her that her clients would be well served there.

Ultimately, Meredith determined that she was more apprehensive about staying with the wrong firm, so she decided the calculated risk was worth it. She moved only four months ago, and while there are still some stragglers, within the first month she was at 85 percent portability. Five percent of the book is still a question mark; she decided to cut ties with the other 10 percent, as she found they were not profitable or sizable enough to continue to warrant her attention.

Use the time before a move to ensure you’ve properly prepared and solidified relationships, and you’ll find that the right clients will follow—along with the success you seek.

Mindy Diamond is President & CEO of Diamond Consultants in Morristown, N.J., a nationally recognized boutique search and consulting firm in the financial services industry.

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