Navigating the challenges of a changing advisory practice

Register now

What happens if an adviser dies, retires or otherwise become unable to work?

Advisers must set up their practices to be prepared for all three of these possibilities because if any of those situations occur, without a plan in place, clients could be left high and dry, according to Ross Carmel, founding partner at New York law firm Carmel Milazzo & DiChiara.

And in order to ensure that advisers don’t burn bridges and have a positive transition to a new firm, they must review their employment contracts and consult legal counsel on obligations in such documents as non-competes and non-solicit clauses.

John Gibbons, managing partner of Allied Financial Consultants in Newtown, Pa., says that he has helped small-business owners, who make up the bulk of his client roster, with transitions.

“We are looked at and expected to help our clients in their transition from owning their business to retiring from their business and therefore thought we need to do the same for ourselves,” he says.

“We all want to project an image of stability, but what do we do when we are in the midst of change? Your clients look to you for stability, but when things are up in the air backstage, for reasons bad or good, you still have to maintain a calm demeanor,” Gibbons says.

To round out their holistic practice, Gibbons and his partner early on brought on two minority partners, not only to help build the practice but to help with the transition when it arrives.
To ensure continuity, “we need to make sure that those clients we served so well for decades continue to be served as well,” Gibbons says.

“That’s the challenge in making our transition plans work,” he says. “It’s not just about leaving our clients.”

Looking more at the legal point of view in transitioning, Dan Andrews, a CFP and the president of Well-Rounded Success, an independent registered investment adviser in Greenwood Village, Colo., recently transitioned from the independent channel at a large broker-dealer.

Andrews says that XY Planning Network, a financial organization of 61 RIAs, based in Sanford, N.C., that caters to Generations X and millennials, helped him re-focus on those key clients and introduced him to virtual software products and compliance practices.

He says that he received major assistance and support from being a part of a study group with other like-minded transitioning planners.

It also broadened his horizons “rather than just drinking the same Kool-Aid from my previous firm,” Andrews says.

This story is part of a 30-30 series on transitions.

For reprint and licensing requests for this article, click here.
Practice management Succession planning 30 Days: On Preparing for Transitions 30 Days 30 Ways