The decision to transition a practice from one firm to another is fraught with uncertainty. That is natural considering the stakes involved and the perceived risk of client attrition.
Advisors often choose to remain in their current situation even when they know that an alternative, such as independence, could be a game-changer for themselves, their family and their clients.
In many ways, the process of moving between firms has not been significantly improved by technology or the emergence of vendors purporting to remove some of the friction of the transition. New paperwork, new client logins, the risk of disruption and the general uneasiness around change remain a part of the process.
Here are five tips to keep in mind when it comes to making the transition a seamless one.
1. Manage Perceptions
Advisors must hold fast to the reality that any disruption or inconvenience that clients may experience is perceived as far more onerous by the financial professional than the reality of the situation.
Advisors believe that clients will chafe at the relatively minor requirements that will affect them when the actual experience is more of a non-event that clients understand and complete willingly. We see client retention rates of 95% to 100% in virtually all the cases when we move advisors toward independence, and often client loss is either by design or represents addition by subtraction within an advisor's book of business.
2. Communicate Clearly
When the messaging and explanation of the long-term benefits of the change are communicated up front, clients are much more understanding and even enthusiastic than advisors expect. Advisors should be crystal clear about the reasons for a change, whether based upon greater ability to provide unconflicted products or advice, the opportunity for an improved client experience through technology or service, or the possibility to build a practice on their own terms.
All of these explanations will resonate with clients, many of whom are entrepreneurs or business owners themselves, and understand the lure of autonomy and independence.
