How to Utilize Transition Services as a Financial Advisor

Change is sometimes necessary for growth. That may mean a change of scenery, as you move from one advisory or wealth management firm to another. Or it could mean a change in your business model if you’re ready to go independent and start your own RIA. Financial advisor transition services can aid in making the next phase of your professional journey as smooth as possible.

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How to Use Financial Advisor Transition Services to Grow

Working with a transition service isn’t a requirement for financial advisors who are ready to make a career move, but there are some benefits to be had in doing so.

For instance, a financial advisor transition service can assist you with the more technical (and tedious) aspects of the transition, such as repapering and updating client information. Reputable transition services should also be well-versed in compliance rules to ensure you’re adhering to all applicable regulatory requirements.

With that in mind, here are some tips for using a transition service to take the next step in your business.

1. Understand Your Transition Model

The nature of your transition can influence which type of transition services you seek out. Going independent may mean:

Starting an RIA that you have full ownership of
Affiliating yourself with an independent RIA
Partnering with an RIA aggregator

If you’re moving to an independent RIA or joining forces with an aggregator, you may have access to an in-house transition team that can guide you through the process. If you’re starting an RIA alone, you’ll need to find a transition service that caters to that situation.

Financial advisor transition services may be bundled with other services. Schwab, for example, is one of the largest RIA custodians, but the company also provides transition services to advisors who are ready to go independent.

Advisors who use Schwab for their transition work with a Business Development Officer (BDO) to create a personalized, end-to-end plan. LPL Financial, which is an independent broker-dealer and RIA custodian, also offers a comprehensive set of services to transitioning advisors.

Transition consultants or specialists are another option to consider if you have unique circumstances. For example, if you’re leaving your firm because another RIA is acquiring it, you may benefit from working with an attorney or team of attorneys who are well-versed in this type of transition.

2. Identify the Services You Need

An advisor reviewing financial advisor transition services.

Financial advisor transition specialists can offer a variety of services, and knowing what you need can help you choose the right company to work with. The scope of services offered may include:

Business model planning and strategy
SWOT analysis
Transition timeline mapping
Client data management
Repapering
SEC registration (if you’re launching a new RIA)
Client notification and communication
Account setup and client onboarding
Technology training if your transition requires the adoption of new platforms or software solutions

While you’re assessing your needs, consider how much of the weight you’d like the transition service team to carry. Some advisors may be comfortable handling certain tasks themselves, while others might prefer a turnkey service solution. You’ll need to decide where you fall within that range, based on what you have the time and capacity to do.

3. Compare Transition Services

If you know where you want to go with your business and what services you need, the next step is choosing a transition service to work with. Asking certain questions can help you narrow down the list of potential candidates.

Here are some questions to ask as you compare advisor transition services:

What type of advisor transitions do you have experience with?
Can you describe the range of services your firm offers?
What tech capabilities do you offer, and do you assist with integration and training, if necessary?
What level of support do you provide with logistics, repapering and client communication?
How will you help me minimize disruptions for my clients during the transition?
What measures do you take to ensure client data remains secure through the transition process?
Do you provide ongoing support once the transition is complete? If so, what does that support look like?
What is the cost of using your services?

A reputable transition service should offer a free consultation and give you space to ask these and other questions. Talking to advisors in your network who have completed a transition may also yield some additional insight when choosing a service to work with.

4. Understand Your Role

You may have certain expectations about what a transition service can and will do for you, but it’s equally important to understand what’s expected from you. Approaching a transition as a collaboration can lead to a better experience for you and minimize the likelihood of delays.

What will your transition support team expect from you? It depends largely on the service that you’re using, but may include:

Elaborating on your goals for the transition, or your reasons for making a career move
Assisting with the development of a realistic timeline in which to complete the transition
Sharing client details and other information that’s necessary to complete the transition
Signing and returning required documents promptly
Continuing to adhere to all relevant compliance guidelines through each stage of the process

If you’re sitting down for a consultation with an advisor transition service, ask them to explain what your responsibilities may be and clarify what you expect in return. Transparency on both sides can make the process easier to navigate from start to finish.

Bottom Line

An advisor compares financial advisor transition services.

Financial advisor transition services can help you reach the next stage of your career development when you’re ready to make a change. Some due diligence and research can help you find a service that’s the right match for what you need.

Tips for Growing Your Advisory Business

Launching a new RIA is an exciting prospect and you’ll need a solid marketing plan to help your venture gain traction. An email list, social media content and a search engine optimized website represent distinct aspects of your digital footprint, but there are more avenues you might pursue to build your brand. For instance, you might consider partnering with an advisor marketing platform. 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.
If you plan to leave your current firm to go independent, it’s crucial that you’re aware of what client information you can take with you. Specifically, you should understand the implications of leaving a firm that follows broker protocol rules versus one that does not, and how that may affect your transition.