Transitioning your practice from one advisory platform to another can be an efficient, well- thought-out project — or a complete disaster. For the most part, it’s in your hands whether or not the process is painful.

When I transitioned my financial advisory practice to a new firm nearly 16 years ago, the stock market was in turmoil following the burst of the dot-com bubble. My clients were not only dealing with tumbling markets, but had to adjust to working with an adviser in a new setting. I learned quite a bit about transitioning from that experience.

Flash forward to today: Transitioning to another advisory platform does not have to be this difficult. In fact, it can be much less invasive when executed with care and diligence.

Transitioning to another advisory platform does not have to be difficult, says Daniel Schwamb, senior vice president of business development at Kestra Financial.
Transitioning to another advisory platform does not have to be difficult, says Daniel Schwamb, senior vice president of business development at Kestra Financial.

The landscape today presents challenges to planners from all angles. Advisers are tasked with managing client expectations, communications and investment performance, all while maintaining efficient back office operations and complying with increasingly stringent government regulation. These forces are tempting more and more firm owners to contemplate transitioning their practice to a full-service advisory platform to take off some of the pressure.

Certain platforms have also become increasingly sophisticated and comprehensive in the services they provide, including technological capabilities, business consulting, trading support, and more. While the benefits of transitioning to a full-service independent platform are clear, the process can be tricky and firm operators must take great care when making the switch. In my 13 years observing firm owners transition their practices, I’ve seen a fair share of success stories as well as a few real calamities.

With that said, keep these tips in mind when making a transition:

1. Pick a firm with the right transition tools and a solid track record
Be sure to ask about the experience and tenure of the onboarding team. How many successful transitions have they executed in past 12 months? How long did they take? Do they have training programs and timelines? If so, ask for a demonstration and make sure the resources are up to snuff.

When shopping around, you’ll find many advisory platforms fall short in terms of these transition services. It’s incredibly important to make sure the new firm has a strong history of successfully executing transitions and a team in place to offer support throughout the sometimes arduous process.

2. Actually do the trainings
It may seem obvious, but I’ve seen countless transitions fall short of expectations simply because the incoming advisers failed to participate in training seminars offered by their new platform provider.

When an adviser fails to complete the training, it sends the wrong message to their new partners and sets a dangerous precedent for the future of the relationship. A limited understanding of the new processes and procedures also makes the adviser look unprofessional in the eyes of the client.

Completing the training seminars before, during and after the transition can also go a long way in maximizing the assets brought over from the previous platform.

Recently, I saw a firm transfer $140 million of assets in three weeks primarily due to their swift and comprehensive understanding of their new systems through the training seminars.

3. Keep it on the down-low
Loose lips sink ships. Advisers typically feel the urge to tell their clients, especially the large ones, about this exciting new move. However, regulation may prohibit discussing a transition with a client until after it is completed.

In fact, if you’re transitioning from a wirehouse, the adviser usually is only allowed to bring clients’ names, phone numbers, home address, email address and account type information to their new platform.

In my experience, informing clients of a move before it happens can lead to disaster. Knowing that there is a strong relationship between adviser and client, it is imperative to fight the urge to break industry rules or employment agreements. Clients often do not understand they can get their adviser in trouble by telling the wrong person. If word gets out, the adviser could face regulatory fines and penalties.

4. Prepare a disciplined client communication strategy
Immediately following the transition, the implementation of a rapid and disciplined communication plan is essential to optimizing asset retention.

Considering they have been left in the dark up to this point, clients will likely be brimming with questions about how the transition will affect their accounts. Begin with phone and email communication and then schedule as many in-person meetings as possible in the following weeks.

Remember, investors want continuity. Anytime a client begins working with a new adviser, they’re starting a relationship from scratch. Be sure to emphasize the benefits of the new platform and remind clients that no other adviser knows their personality, risk tolerance, family situation and goals better than you.

Follow the above four steps and a successful transition will be yours. The success of your transformation is in your hands.

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