Starting your own business can be one of the most exciting and fulfilling decisions an
Advisor can make. However, your focus should remain squarely on continuing to engage
with your clients and not the extensive work of moving the assets that often catches
Advisors off guard.
Research illustrates the challenge perfectly: while a third of Advisors say that retaining clients during a transition will be the indicator for future success, nearly 50% specifically fear they will lose clients during the transition. However, the data dispels this myth. In fact, according to a report by Cerulli, over 80% of an advisor’s clients transition with the advisor when he or she moves to a new firm.
This article delves into the transition process and offers strategies to help you retain your client base when transitioning to a new firm.
What Makes Transitioning Difficult?
Transitioning presents several common challenges for Advisors, including:
1. Navigating Legal and Compliance Processes
Advisors may face various legal restrictions and compliance requirements during their transition. Many Advisors are not prepared or do not understand their employee agreements , which is why 85% of Advisors recommend their peers seek legal help with it when they transition.
Advisors may face various legal restrictions and compliance requirements during their transition. Many Advisors are not prepared or do not understand their employee agreements , which is why 85% of Advisors recommend their peers seek legal help with it when they transition.
This consultation with an attorney who specializes in such activities can greatly influence various aspects of your transition, from managing client data to promoting your new business. Any misstep could lead to costly fines, legal repercussions, and a significant delay in your transition.
Two further factors complicate matters:
- Location: Regulations vary by jurisdiction and may be enforced in diverse ways.
- Contractual Obligations: Your legal rights regarding extracting and using client data will depend on the contract you signed with your current firm.
As a result, most Advisors require consultations from legal experts to ensure their transition is legal and compliant.
Fun Fact: RFG Advisory provides all legal reviews with attorneys who specialize in exactly these cases prior to the start of any transition.
2. Removing Friction for Clients
Despite Advisors’ concerns, research suggests they retain, on average, 87% of their clients when transitioning. However, most clients expect the process to be simple, which is where most Advisors struggle.
The most common points of friction for clients include:
- Complicated Paperwork: Clients should not be expected to navigate excessive administrative work.
- Delays to Service: Clients should not feel their needs are being put on hold to facilitate their transition.
- Unclear Timelines: Clients should always feel confident about what you are doing for them or when to expect the transition to be complete.
Fun Fact: The dedicated team of Transition Specialists at RFG Advisory take over the administrative burdens and the account openings/asset movement so an Advisor can focus on their communication with clients.
3. Client Communication
Advisors must maintain regular contact with all clients throughout the transition process, but this can be challenging when you have a large book of business. A lack of communication can be detrimental to client relationships for a few reasons:
- Lost Trust: Clients may perceive you as “over your head” and unable to manage the process effectively. This reduces trust and increases the likelihood of attrition.
- Lack of Care: Clients may perceive poor communication as evidence that you do not value them sufficiently. They may suspect you are engaging with other clients more frequently and, therefore, start to consider other Advisor options.
Fun Fact: RFG Advisory arms the Advisor with the tools and resources needed to immediately engage with their client. From creating the script for phone calls to tombstone ads and creating an entire new brand.
Three Strategies to Help More Clients Transition with You
1.Planned Communication
These should include:
- Announcement Templates: A clear message that explains precisely why you have chosen to leave your firm and what your clients should expect in the coming days.
- Update Templates: Messages that can be sent throughout the transition to keep clients in the loop.
- Marketing Messages: A marketing campaign that launches your new business and articulates the value you offer clearly.
With these templates, you can maintain high-frequency communication and reduce uncertainty without adding extra work hours.
Fun Fact: RFG provides Advisors with all of these communications.
2. Personalized Outreach
While communication templates are valuable, most clients still expect you to reach out personally to address their specific concerns and needs. Advisors should seek ways to minimize the volume of administrative and operational work they are responsible for during the immediate transition period, ensuring they have plenty of time to talk with clients on the phone.
While you should engage directly with the specific client’s concerns, having messaging plans for personal outreach is still helpful. This approach can help you highlight key facts and present a consistent and engaging narrative about the potential benefits your clients may experience during your transition.
Examples of such benefits include:
- Fewer Restrictions: After transitioning, many Advisors may access more investment options, potentially benefiting your clients’ investment outcomes.
- Advanced technology: The new firm may offer a more modern approach to financial planning, performance reporting, and customer service.
- Building Your Own Business: Explaining to clients your desire to own your destiny and build a legacy for yourself and your family is a powerful message.
- Alignment of Values: Switching firms to another one, or your own, where you can match your values with those of your peers and colleagues helps you serve your clients better.
Fun Fact: RFG Advisory provides Advisors who transition with custom scripts and bespoke branding support so they can build their own business without compromise.
3. Streamlined Onboarding
Advisors should make it as fast and straightforward as possible for clients to follow them to their new business. This will reduce disruptions to service, build confidence, and accelerate the transition process.
A few standard factors to consider here are:
- Electronic Signatures: Using DocuSign or a similar platform can simplify the paperwork process for your clients.
- Resources: Create branded documentation that clients can use to understand what to expect from your new business quickly.
- Timelines: Clients want certainty during a transition more than anything. As a result, providing a clear timeline can dramatically reduce their stress and improve their experience.
Fun Fact: Advisors who transition to RFG take advantage of all of these benefits.
Switching Platforms or Firms: What Should You Look for to Ensure a Smooth Transition?
To achieve a smooth transition that maximizes client retention, and accelerates your growth, Advisors should seek a partner that offers the following:
- Comprehensive Support: This should include everything from marketing and compliance to technology setup and operational assistance. Comprehensive support provides access to a wide range of resources, including business growth strategies to attract new clients, operations to handle all the back-office support with custodians and vendors, compliance services to mitigate risk, and a variety of
- Innovative Technology: A robust technology platform may enhance client management, streamline workflows, and improve overall efficiency, helping you dedicate more time to client relationships. The right technology can be a significant change for Advisors, enabling you to deliver more personalized and efficient service.
- Dedicated Transition Team: A dedicated team of experts familiar with the process aims to facilitate a smooth transition while striving to minimize disruption to your business. This support is crucial for minimizing errors and ensuring the transition is completed on time to get you back into production quickly.
- Community Support: A collaborative community of like-minded Advisors can provide valuable insights, strategies, and support. This allows you to share experiences, learn from each other, and access the collective wisdom of peers that can lead to better decision-making.
- Established Track Record: Consider partnering with a firm known for its experience in supporting Advisors through transitions, with a track record of positive outcomes and testimonials.
Retain More Clients When You Transition with RFG Advisory
At RFG Advisory, we celebrate Advisors’ movement through intentional offerings. With our technology, marketing support, and community of growth-orientated Advisors, we help Advisors make a seamless transition and build their own business without compromise.
Ready to transition? Let’s explore how RFG can help. Schedule a call here.