Switching firms and client retention

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Jun 9, 2006 4:42 pm

can anyone tell me what percentage of assets a broker generally retains when he switches firms?  has anyone done any research on how brokers generally fare?  i’m looking for a good report or article on the topic if possible.

Jun 9, 2006 4:49 pm

Believe the norm is about 80-90%. Depends on whether you have sold YOURSELF to the client(s) and not have sold the firm.

Jun 9, 2006 4:50 pm


I have said this on similar topics posted here before.  The key thing to keep in mind is not total assets.  You have to drill down on your book and determine where you are generating revenue from - what clients, how many and how much.  When I moved, this was a recommendation given to me and I have since seen 3 others move too and have seen the same thing.  What I found was that across my book, I was getting roughly 80% of my revenue from you guessed it, roughly 20% of my clients.  These were the clients I went after hard, first and with priority.   Outside of them, I went after key clients that may not be generating revenue at the moment, but were good candidates for my practice - they fit my ideal client profile and/or where providing solid referrals.

Out of what I targeted, I believe w/o checking, I pulled in something like 95% or more of what I wanted.  I also left a lot of b/c clients by choice.  Now mind you, I went indy and had a plan of building an almost exclusive recurring revenue book moving forward.  Going from wire to wire, well then assets may be more important if you need to hit certain numbers to qualify for the entire upfront check offer.  That I don't really know much about as I never had interest in pursuing it.

Jun 11, 2006 5:28 pm

i’ve heard this 80-90% figure tossed around quite a bit.  does anyone have any solid evidence to back it up?  are there any research reports or articles that could be referenced?

Jun 11, 2006 6:44 pm

The figures all depend on where you are coming from.  Going from wirehouse to wirehouse, I've seen most bring over approx. 60-70% of what they try and bring over.  I'm not experienced with wirehouse to independant, though I imagine it's similar, perhaps a bit less.

Brokers that attempt to go from a bank to a wirehouse have a very, very, very tough time.  Generally bring over 10-20%, if that.  We had a few "big hitters" (million plus) that built there books thru the bank very quickly (3-5 years) from the large referrals and took a big check from a wirehouse.  A year later, they've brought over approx. 15% of their assets, and their gross is down approx. 70%.  AND the bank is trying to get many of the customers that left back.  In some instances they've already been successful as the client still maintained some sort of relationship with the bank (i.e. loans, deposits, bill pay, mortgages, etc).  Now the brokers' that left are stuck there for seven years.  No referrals just a desk and a phone.  And a manager who must be wondering what the heck happened to this "huge" recruit he landed. Career suicide, as it were.

Jun 11, 2006 7:44 pm

I have only moved once in my life. I and many others left my previous company. Our results were very similar. If all your clients are friends or family the number is higher. 

50% come right away.within one-two months

 10-15% come within 2-6 months. these people are just lazy and are slow to get paperwork back.

10% are confused by the change and will come later

10% will leave you and the new broker at your previous company all together. They had other realtionships at other brokerage firms and they only stayed for you, but you were not thier primary broker.

10% that you want will not come no matter what. these people we had good relatioships with and thought the would come right away. They did not. These are the ones that really hurt your pride.

the other ones are worthless assets that you do not want anyway. they could be good accounts whom you hate or are  pain in the butt accounts that you do not make money on. The others you have no relationship anyway.

lastly, you will get more money out of the ones that come over because you are thier primary broker. This was a positive surprise. 

Also you get a pile of money to do this ,bigger than you ever could save

Jun 11, 2006 9:30 pm

2 questions for anyone:

"Pile of Money" - does LPL pay any incentive?

How much active contacts do you make to clients after you leave.  I've been told to send a letter and wait by the phone.  Sounds odd to me.

Jun 12, 2006 9:09 am

R2J - I have been here for 3 yrs (LPL) and they offered little in terms of $$$ on my move which is fine, I made it up rather quickly. 

In terms of the letter; it’s a blind leap of faith and it is really dependent on how well you built your client relations.  I was rather surprised at who and how many contacted me.

Jun 12, 2006 11:53 am

On indy deals, such as LPL or RJ, you’re probably looking at 2-3% of trailing 12 max, with an interest-free loan for up to another 10% of trailing 12.

Jun 12, 2006 4:31 pm

Having done this a few time for several different brokers when I was a sales assistant I found that they lost 20% just due to a change in clearing firms (which means new forms)!   Changing firms altogether may result in a bigger loss, though as others have said, if you've done your job selling YOURSELF as a necessary part of their financial plan, you'll probably keep more.

Also simplifying the process where possible helps.  Some people are just too lazy to make the change, others use it as their excuse to dump pros they aren't impressed with.  Plus, of course, the minute you leave the guy in the next desk is dialing your book!

Jun 15, 2006 11:55 am

[quote=kreg37]can anyone tell me what percentage of assets a broker generally retains when he switches firms?  has anyone done any research on how brokers generally fare?  i'm looking for a good report or article on the topic if possible.[/quote]

My move a few years ago netted 90% of clients. There are always some who will not follow you. From talking to brokers who have moved the number seems to be about 70% for wirehouse brokers moving to another wirehouse or regional.

If you move make sure your deal covers this loss. And, be prepared for some very frustrating days as clients you thought were solid decide to stay with your old firm. Equally frustrating, the "friends" you thought you had at your old firm hammering your clients to stay and then telling you "It's just business"

The grass may not be as green on the other side as you think.

Lastly, try to break the mold and not buy a high end car with the front check.

Jun 15, 2006 12:27 pm

  I left 13 months ago, have more assetts than when I left!!! Been in biz 10 plus years. Grass is greener on the other side.Left the greatest sales force in the country. Only regrett is I didnt leave sooner.

Jun 15, 2006 11:24 pm

Took 92% of all the assets 2 1/2 years ago and now have 30 million more than I had when I was at Jones (some market growth obviously).  I actually seem to attract more assets as an indy for some reason.  I think it's a combination of my no longer being at Jones--and my own attitude that's allowed me to accomplish this.

It's not only greener on my side of the fence--it's alot more fun too!

Jun 16, 2006 6:14 pm


just curious how much do you bring in assets per month?  Have you calculated where your business comes from?  Referrals seminars etc

Jun 17, 2006 7:55 pm

Although I'm not as organized as I use to be--I bring in an average about about 6-8 million per year from new clients and probably about another 3-5 million from existing clients.  I work about 35 hours per week. 

I don't really have any monthly goals anymore--but I should.  Business is better than 80% referral.  Been trying to work more on recurring revenue (fee based & C shares) and clients like that approach much better once they understand the difference.

Jun 18, 2006 1:08 am

How are you getting new clients?

Jun 18, 2006 11:46 am

80% referrals.  Many of the referrals come from existing clients and a few come from CPA’s and attorneys. 

Jun 18, 2006 2:13 pm

my experiences are that referrals from cpa’s and attorneys are very hard to come by.

Jun 18, 2006 6:20 pm

3 of my top 5 largest clients from CPA or attorney referrals.  It takes years of developing a business friendship (at least it did me) before they started referring me any clients.  I actually ended getting over a half dozen CPA's as clients myself through the process--and this was completely unintentional.  A few referred their parents to me as well. 

I'd start by taking a CPA to lunch and discussing some mutual clients.

Jun 18, 2006 9:42 pm

you’re one of the few.