Repapering clients—or an entire book of business—has always filled advisors with dread; the prospect of undergoing the disruption—to themselves and their clients—is often the top issue that keeps advisors from changing firms.
Even if an advisor has made the decision to move and is hopeful about the future, the process of moving clients and their accounts from one independent broker/dealer or custodian to another is a time-consuming, and still largely manual, paper-driven process prone to errors.
“The pain to leave versus the pain to stay,” said Jeff Nash, CEO of third-party advisor transitions and M&A consulting firm Bridgemark Strategies, describing the calculation being made by advisors considering a transition between firms. Nash has, over the years, come up with his own calculation based on looking at years of advisor surveys from Cerulli, Discovery Data and others: Each year about 17% of advisors consider a change, serious or not, and in the end about 7% end up making a move.
“What about that other 10%? For many advisors it is the pain of the transition itself that keeps them where they are,” he said.
Advisory technology consultant Skience today announced a digital tool set it calls the Advisor Transitions Solution, which the company says digitizes the repapering process and provides e-signature tools all meant to grease the track for advisors moving from one wealth management firm to another and bringing client accounts and assets with them. Skience won a 2020 WealthManagement.com Industry Award for Technology Providers: Client Onboarding/New Account Opening.
“Our goal here is to shorten that transition cycle and reduce the bad experiences often seen in the past and do it all in a digital, compliant way,” said Skience Chief Operating Officer Marc Butler.
Skience wants to license the platform to broker/dealers and custodians, enabling the advisor joining that firm to securely collaborate with clients and collect any required personal information, open the new accounts and transfer the assets, all while adhering to SEC and FINRA regulations. This includes guided workflows for advisors and real-time validation checks during the client data migration.
While there are some built-in Salesforce capabilities that will help some firms using the platform, the solution is otherwise CRM-agnostic, Butler said.
To be clear, the tool is available to be used only after the change in an advisor's Form U4 or U5, meaning after the advisor has notified her or his previous firm of the move and reached agreement with a new one.
“This will be driven by IBDs and custodian recruiting departments, and when an advisor signs up they will receive notification from the firm saying ‘hey thanks for joining our firm and here is the process step-by-step,” said Butler.
An open pilot of the technology will begin in April, according to Butler. Firms also have the opportunity to white-label the offering and apply advisor branding for client communications.
He said that while the firm already has advisors enrolled in the pilot, they are open to speaking with other interested advisors asking only that they continue to provide feedback on an ongoing basis during their transitions.
Pricing will be based on a yet-to-be-finalized AUM/account-size minimum, plus a per-advisor-transitioning fee—but some of the early firms to engage with Skience “will probably be price-advantaged,” he said.