Changing Firms? 5 Steps to Help Retain Your Clients

“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?”

These are the questions that keep anyone who is thinking of changing firms up at night. And, they are the right ones. After all, spending a professional lifetime building and nurturing relationships, the last thing an advisor wants is to lose ground—especially since the motivation, presumably, for any move should be to improve the client service model and accelerate growth.

So, how should someone in exploration mode assess the wisdom of changing jerseys?

Consider these five steps:

Objectively evaluate your book client-by-client. Break it down into three lists, A’s, B’s and C’s. A’s are for the ones that you know are yours for life. B’s are for the questionable ones—likely to follow you anywhere, but not 100% sure. C’s are definitively up for grabs. If the A’s don’t far outweigh the B’s and C’s, then perhaps staying put is your best bet.

Evaluate the genesis of each relationship: Were they inherited and, therefore, not really “yours” or have they been self-generated? How “sticky” are the assets to your firm/bank?

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?

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”. It isn’t possible to put your book up for bid and not lose at least one or two clients. Could 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?

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 at heart, I believe verily that you are better off staying put.

While every advisor who has ever changed firms admits to feeling apprehensive about client portability until those ACAT’s started rolling in, it is heartening to know that most quality advisors changing firms for the RIGHT reasons move the overwhelming majority of their assets within the first two months, and generally hit 100% of their recruited assets by month nine.

Broker Protocol – the seminal document that allows an advisor to move with impunity as long as he doesn’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 gotten back to 100% of their asset base within six months and to more than 110% of original assets within a year.

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 some cases, this could be very true but, in many, I think that advisors sell themselves short when they allow fear to rule them—especially when the potential upside could far outweigh any loss.

In the end, clients will stay with who they are comfortable with. 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.