Exciting new horizons await, but let’s get real here – not everything can just slide over to your new firm from your old firm. Sorry for the downbeat news flash but it’s the truth. You need to be smart about what assets can or should move during a firm transition. Let’s dive into the nitty-gritty!
No more wishful thinking. You have to assess, evaluate, and strategize. Transparent discussions with clients are vital once you’ve decided to make a move. We’re talking about assets moving over anywhere from a whopping 99% to a meager 25%. The latter the unfortunate percentage for advisors at private banks with locked-in client assets.
So, how do you figure out what’s coming when you go to make a move? To begin with, you just might want to leave some clients and assets behind, perhaps they are shared with a non-transitioning team, or they don’t fit with your vision of your practice at the new firm.
100% AUM migration is as rare as a unicorn. It is important to be realistic and consider all the potentially troublesome factors: alternative investments, firm-tied proprietary investments, splits, lockups – you name it! Check with the new firm too; they might have restrictions that limit your transition dreams.
A legal review is a must. Read your contracts carefully, ideally with a lawyer advising your every move. Watch out for limits on moving referred clients or team dynamics mucking things up. No breaking those contracts unless you’re into expensive lawsuits and financial disasters.
Once you’ve done the dirty work, have a heart-to-heart with your clients. Leave nothing in the dark. Explain what’s staying and how it’ll be managed. It might be an unwelcome transition for them but paint a picture of the benefits and opportunities at the new firm.
This is a process an advisor shouldn’t do alone. Get a seasoned recruiter with transition expertise to guide you through the storm. The new firm’s internal transition team can lend a hand too. A lawyer as we’ve just mentioned is an imperative to round out the crew. Best of luck in your transition.
As the Editor of The Gershman Group, a boutique financial services consulting firm, TGG brings expertise in financial analysis, strategic planning, and market research. With a keen eye for detail and a passion for helping businesses navigate complex financial landscapes, TGG delivers insightful, high-quality content to empower informed decisions. Backed by years of industry experience, TGG makes complex topics accessible through clear and compelling communication, shaping the firm’s thought leadership and commitment to excellence in financial services.
