Transition Checklist for Financial Advisors

Transitioning can mean different things for different advisors. It can mean beginning the next phase of a career with a new firm, or going independent and starting an RIA. Or you might be somewhere in between, and partnering with an RIA aggregator to build your business. Wherever you are on your professional journey, a financial advisor transition checklist can help you navigate each step of the way.

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What to Include in a Financial Advisor Transition Checklist

Transitioning is a measured process that requires proper planning and research to execute. This checklist covers some of the most critical areas that may require attention as you move from point A to point B.

Determine a Timeline

Before you start planning in earnest, consider your estimated timeline. You’ll need to:

Choose a resignation date
Establish a start date at the new firm
Communicate your transition plans to the members of your team
Broach the topic of transition with your clients

If you’ve accepted a position at a new firm, transitions can happen quickly. You may be out of your old role and into your new one in a matter of weeks. If you’re starting an RIA, on the other hand, your timeline will likely stretch out over several months.

Review the Legalities

Moving to a new firm or establishing an RIA may have legal implications that it’s wise to familiarize yourself with. Here’s what to add to your checklist during this phase of planning:

Review your employment agreement for non-compete and non-solicitation clauses that may impact your ability to move to a new firm or business model.
Determine what client information you can legally take with you under Broker Protocol rules, if applicable.
Review the guidelines for client communication, including when and how you’re required to serve notice of your transition.
Check to ensure that you have the proper licenses required for the transition and that your credentials are up to date.
Complete any required paperwork to transfer securities licenses to your new employer or RIA (for instance, you’ll need to complete Form U4 when joining your new firm).

It may be wise to consult an attorney if you’re confused about any of your responsibilities, or any limitations on what you’re allowed regarding client communication or data. A legal expert can review your employment agreement and broker protocol agreement, if your firm is subject to those rules, to help guide you through the process with as few snags as possible.

Prepare Your Clients

An advisor meets with a legal expert to review their employment agreement and broker protocol agreement.

At some point, you’ll need to tell your clients that you’re moving on, or that you have moved on. If your firm follows the Broker Protocol, you won’t be able to communicate with your clients regarding the transition until after you’ve resigned and are employed by a new firm.

Here’s what to consider with your communication strategy:

Be honest about the reason for the transition
Clearly define how the transition is beneficial for them
Address what clients can and should expect from you going forward
Welcome clients to ask questions about the transition and answer them promptly

Here are some of the questions your clients may have:

Why did you leave the firm?
Was there a reason you didn’t give advance notice of the change?
What should I expect to be different with your new firm?
I’ve heard this firm has a bad reputation. What do you have to say about that?
How long will my account take to transfer?
Why do I need to sign a new contract?
Are your fees or billing practices changing?
How will I be able to get in touch with you? Do you have a team I can talk to if you’re unavailable?
Can I stay where I am and transfer my account to another advisor?

Full transparency is the best approach. Answer client questions as thoroughly as possible and give reassurance that the transition will benefit both you and the client.

Ideally, you’ll be taking most, if not all, of your clients with you. However, you should be prepared for some of them to remain behind, or at the very least raise objections. Being able to counter those objections with positives associated with the move could help persuade them to reconsider.

Ensure Compliance

Compliance is crucial, whether you’re moving to a new firm or starting an RIA. Here are the most important compliance items to add to your transition checklist:

Organize the client data you’ll be taking with you, as allowed under the Broker Protocol, if applicable.
Maintain all records of communication with clients regarding the transition.
Coordinate repapering for those clients who plan to follow you to your new firm, including reviewing contracts, updating them and obtaining new signatures.
Complete any continuing education (CE) courses required to maintain professional designations or certifications.
Disclose any political campaign contributions subject to pay-to-play rules to your new employer.
Provide information about your personal securities investment accounts to your new employer.
Disclose any outside business activities you engage in to your new firm, if applicable.

While not necessarily compliance requirements, you’ll also want to:

Update social media profiles to reflect your new position and place of employment.
Get new business cards with your updated contact information.
Submit an up-to-date headshot or bio to your new employer for publication on the firm’s website.

Financial advisor transition specialists can help you with each phase of the process, whether you’re moving to a new employer or starting an RIA. You may consider working with a professional transition team if you have a large book of business to move, or your exit from your current employer becomes contentious.

Bottom Line

An advisor notifies her clients that she is moving to a new firm.

Transitioning as an advisor may be necessary to advance your career. And the more prepared you are, the smoother it may go. This financial advisor transition checklist is designed to help you prepare for the different actions you’ll need to take to complete the move efficiently and compliantly.

Tips for Growing Your Advisory Business

Transitioning can sometimes mean the loss of clients if they choose to stay behind. That means you may need to invest more time in marketing your services to attract clients who can fill the gaps in your book of business. Partnering with an advisor marketing platform can help you gain exposure for your business. SmartAsset AMP (Advisor Marketing Platform) is a holistic marketing service financial advisors can use for client lead generation and automated marketing. Sign up for a free demo to explore how SmartAsset AMP can help you expand your practice’s marketing operation. Get started today.
Organization can be your best friend when navigating a transition. Calendar tools and spreadsheets, for example, can be useful for keeping track of key dates and tasks during the transition process. You may also use spreadsheets to organize client contact data and other account information that you’re allowed to take with you.