Creating an Effective Financial Advisor Transition Plan

September 7, 2021

There are a variety of reasons you may be considering switching firms. Maybe you’d like to be somewhere with more administrative and operational support. Or maybe you’re looking for more growth opportunities and earning potential.

No matter the reason, financial advisors across the country are seeking out better opportunities with more autonomy. Should you switch firms?

If the answer’s yes, you’ll need to work through some downsides of transitioning. You might encounter client attrition, lost revenue and piles of paperwork on your way to a happier future. Follow these steps to ensure your transition to a new firm is as smooth as possible.

Do Your Homework Now

What are your goals? What’s your ideal workplace? What types of clients do you want to serve? What support do you need? Once you’ve identified what you need from a firm — and determined that’s not possible at your current place of work — it’s time to start researching and planning. Consider talking to trusted friends who have already transitioned to a new practice (not those at your current firm), and ask them what did and didn’t work. In the interview stage, be sure to ask specific questions about work-life balance, transition support, technology stacks, etc. — anything that you’ve identified above.

Review Your Contract

Do you have a lawyer who’s well versed in the securities industry? You should. It’s worth your time to seek legal counsel and carefully inspect your contract’s non-compete, non-solicit and non-accept agreements. (And hopefully you did this before you accepted the job in the first place!) Your attorney can help you navigate these tricky restrictive covenants and the ins and outs of Protocol versus non-Protocol firms.

Notify Your Clients

Now that you’ve met with your legal counsel, you should have a clear understanding of what you can and can’t do, especially regarding taking clients with you. Once you’ve resigned, it’s off to the races to share your next steps with your clients, so plan this communication in advance. You’ll want to have an email or letter prepared that honestly explains how your move will benefit them. From there, schedule follow-up calls and virtual or in-person meetings to answer questions about the “why” behind your move, any changes in fee structure, paperwork and more.

Manage Your Expectations

Despite your best efforts, you’ll still run into snags. You may be confident your lifetime clients will make the move with you, but you can’t count on it. Client attrition will likely be more than you expect, and it can cause both emotional and financial stress. Your day-to-day job is also sure to change for a while, as you’ll spend the majority of your day working through paperwork to transfer client assets — a process that may take longer than you might anticipate. Planning for these temporary roadblocks will help you manage stress in the long run.

Make a Good Final Impression

You’re a professional, so act like one — even if your workplace conditions were less than ideal. An amicable split will better serve both you and your clients.

Ready to Put Your Financial Advisor Transition Plan Into Practice?

Chat with a Farm Bureau Regional Manager today about how you can better reach your goals at Farm Bureau Wealth Management.