Displaying items by tag: changing firms

When financial advisors decide to change their broker-dealer, they often face the challenge of transitioning their clients smoothly. Many worry about the paperwork, duration, and impact on revenue.

 Insights from advisors who transitioned to Osaic Wealth reveal that 75%-100% of clients typically move with them, and the process takes about 60-90 days, though some clients move later. Having dedicated support is crucial.

Proper preparation, clear client communication, and understanding new systems are key to a successful transition. Advisors also note that initial revenue may drop but generally stabilizes or increases within a year.

Finsum: Leveraging the new BD and technology can really aid in the transition.

Deciding to switch broker-dealers can be transformative yet challenging for financial advisors. But Advisors should thoroughly consider how their new environment will affect them.

Evaluate the support, technology, and practice management tools the new firm offers to boost your business. Ensure the firm's values and advisor focus align with your working style.

Confirm that the firm supports your specific business needs and niche. Research the firm's reputation and past issues to ensure it aligns with your professional image.

Lastly, trust your instincts and seek expert advice if needed to make an informed decision.

Finsum: Sometimes we get too caught up in the minutia when considering a switch but these high-level questions are important.

Advisors often hesitate to switch firms due to fears of client attrition and contractual issues, even when better opportunities exist. Clients, however, are generally supportive of changes when benefits are clearly communicated. 

The transition process is still cumbersome, involving new paperwork and logins, despite technological advances. Effective communication about the long-term advantages of the move can mitigate client concerns. 

Partnering with a firm experienced in advisor transitions can help streamline the process. Understanding and managing perceptions can lead to a smoother transition and higher client retention.

Finsum: The right affiliate can make this transition much smoother so consider this when making the jump. 

Non-compete agreements are rare among wirehouse advisors but more common in the employee RIA space. However, non-solicitation pacts are more prevalent and are different in nature, allowing advisors to move to competitors but restricting direct client solicitation. The FTC's recent rule banning most non-compete agreements has stirred discussions in the financial services industry, particularly regarding its potential impact on advisor movement.

Despite concerns, many advisors already operate without non-competes, and the rule's long-term impact remains uncertain due to expected legal challenges. The financial advisory industry is currently experiencing high levels of recruiting and acquisition activity, driven by advisors seeking better fits for their practices and firms enhancing services to retain talent. 

Non-solicitation agreements allow advisors to announce their moves indirectly, hoping clients will follow, but moving firms still entails significant effort. 

Finsum: These legislative changes are something to keep in mind in recruiting and changing firms, but also when it comes to selecting a new firm. 

In the shifting world of financial advice, the imminent retirement of over a third of advisors within the next decade poses a significant challenge. This shift is driven by the aging demographic of current advisors, with nearly 60% of RIA assets managed by those aged 55 and older. 

To navigate this transition successfully, firms need to focus on recruitment, targeting younger demographics, and modernizing engagement models to mitigate the impact of a declining advisor pool. Succession planning is vital for retiring advisors to secure their financial future, boost their firm's appeal, and mentor the next generation. Clear guidance and succession planning is key to attracting new talent.

Recruiting and retaining young advisors is essential, as they bring fresh perspectives and technological savvy, crucial for engaging younger investor demographics like Millennials and Gen Z. These new advisors can also help bridge the gap between clients and existing advisors as their values can be more aligned. 

Finsum: It’s time to start thinking about recruiting and transitioning or succession planning as an opportunity to expand business in addition to providing a pathway to the future.