For advisors who have decided to forge an independent path and break away from the wirehouse, understanding how to navigate a smooth transition is critical. A strong transition plan can help independent advisors to maximize client retention, ensure compliance with all applicable ethical standards, and guarantee that your new business hits the ground running. 

But for many new independent advisors, knowing how to manage the transition to an RIA, independent broker-dealer, or hybrid practice can seem like an intimidating task. Are you ready to navigate the breakaway transition and make sure your practice is on solid footing from day one? Learn more with our guide:

Do Your Homework

Before making a move, it’s critical to understand both your obligations and your options. From a practical perspective, are you subject to a non-competition or non-solicitation agreement that might affect your ability to effectively transition your practice? Does your current firm participate in the Broker Protocol, and what does the Protocol say about your communications with clients before and during the transition to independence? Do you have all of the licenses and professional designations you’ll need to maximize an independent practice, and should you acquire those licenses before leaving the wirehouse?

Beyond purely pragmatic concerns, advisors considering independence should understand their options: are you interested in a turn-key model where your expense responsibilities are minimal or non-existent, with many available set-up choices but a slightly uniform structure? Or are you ready for more of an entrepreneurial venture, where you’ll choose mostly everything on your own such as, compliance, communication, client service, and technology infrastructure? In either case you would be building a platform that works best for you!

Understanding how you will want to work as an independent advisor is every bit as critical as knowing where you want to work. Even at turn-key firms, you’ll be able to customize your practice to suit your needs and maximize your ability to deliver the very best for your clients. Working with a financial advisor recruiter such as the seasoned professionals at Terrana Group can give you a sense of your options, and allow you to build an advisory model that works best for you. Your financial advisor recruiter will also help you to understand your transition options, guide you and stay in touch with your transition team, making sure you are comfortable every step of the way during and after your transition.

Create A Transition Schedule

By the time you make your transition, you’ve almost certainly created a business plan, and so has your transition team who will break that plan down to the most granular detail. Your transition team has a schedule that includes a list of the tasks you’ll need to complete as you move your business, and the dates by which you’ll accomplish them. This transition schedule might include, among other action items:

  • Consulting a financial advisor recruiter; 
  • Working with an attorney to manage any legal issues that might arise as you move your practice;
  • Preparing a budget for your first year in your new independent practice;
  • Gathering client data you may need as you make your transition;
  • Preparing a compelling client announcement script designed to convince your existing clients to move with your new practice;
  • Preparing for the questions your clients might ask as you make your move; 
  • Understanding your compliance obligations as you transition clients, including preparing contracts for your clients, transitioning custodial paperwork, and providing an ADV and privacy policy, among other compliance requirements;
  • Understanding and meeting your insurance needs for your new firm.

This list may seem daunting, but the right financial advisor recruiter and transition team can make this much easier. Your new firm can help to manage the technical aspects of transition, while a great financial advisor recruiter and transition team can help you develop a communication plan that ensures you maximize client retention.

Understand How Your New Firm Handles New Accounts

Knowing your new firm’s requirements for moving accounts and opening new accounts is an easy-to-overlook step in the transition process, but having an understanding of what you’ll need to do to get your clients started can help you to streamline transition and keep your clients confident in your ability to seamlessly transition their business. 

For some custodians, clients will have to complete paperwork before their new accounts will be opened. For others, however, accounts can be opened without completed paperwork so long as the advisor has the relevant client information to open a placeholder account. Knowing how you’ll have to manage the transition process in advance can ensure that you’re able to move your client accounts to your new practice with no disruption in client service. Once you understand what you’ll need to open accounts in your new practice, prepare client packets you can distribute upon your transition to ensure you’ll collect all of the information you need to switch client accounts without disruption. Most firms allow for these documents to be sent e-signature. 

Develop A System For Tracking Transition Milestones

Most transition teams prepare a spreadsheet or database that allows them and you to keep track of your transition schedule and can help to ensure that nothing falls through the cracks as you make your move. Keeping up-to-date on client transition status — including any necessary transition paperwork — as well as your outreach to relevant vendors and service providers, and your progress toward your transition goals can be a great way to systematize your transition and prepare for the rigors of running your own business. 

Get The Right Advice

Having the advice of a reputable recruiting partner such as Terrana Group, who can explain your options, consult with you on your business strategy and planning, and explain your options based on your AUM, support needs, and career goals is the single most important step you can take in ensuring a seamless and successful transition. 

At Terrana Group, we have three decades of experience in recruiting and consulting for advisors and financial firms. Terrana Group has been involved in nearly 3000 professional placements for Financial Advisors, with client assets transferring to the hiring firm exceeding $67 billion dollars. We’re familiar with every option for independent advisors and broker-dealers, and we’ll be with you through every step of your transition process.

Want to Keep the Conversation Going?

Terrana Group’s experienced and knowledgeable professionals welcome the opportunity to consult with you to determine the right platform for you going forward — one that satisfies your long term objectives and is also best for your clients!

Over the course of nearly 30 years, we have helped facilitate thousands of professional placements for Advisors. We have completed placements in most every major city throughout the United States, while building deep relationships with the advisory world’s most sophisticated and notable firms — including major Wall Street brokerages, most Regionals, Boutiques, Banks, Independent Broker Dealers, RIAs and Custodians. We have a broad knowledge of the deals that are currently being offered and will ensure that you are being presented with the offer which will be best for you.

Confidentiality, professionalism, and respect are essential to our practices and beliefs; we handle each and every step of the placement process with complete communication, keeping you informed while making the process smoother from beginning to end. 

We are proud to always be considered as a great asset by our clients because of our proven expertise, many years of knowledge, and acute attention to detail. Financial Advisor Recruiting Services are not all created equal; we guarantee that the TG experience for clients and candidates is always world class.

We are based in Chicago, with a nationwide reach. Let us know you are interested by contacting us today. To get the conversation started, email info@terranagroup.com or give us a call at 312.655.8380 today.