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days. “You have to phone [clients] quite quickly and get your message out” that you’ve moved, Gotts says. While phone numbers are public information, you can’t email clients without their authorization. She was in a race to contact clients with her previous firm, which also sent out a client letter that first morning.
Stam says advisors must refrain from providing advice to clients in writing (including email) until their licences are transferred to their new firms. Novachis says that takes about five days.
As part of his pitch, Mahrt explained how he decided on his new firm, specifically how the move benefited clients.
Client meetings are required for onboarding, but, if done electronically, the process can take several weeks instead of months, Novachis says. Assets typically trans- fer quickly following client consent, he says.
For Gotts and Sweeney, the transfer of client assets took longer than expected — a few took more than six weeks — resulting in the new firm contacting IIROC and some clients writing letters of frustration to the previous firm. If she had to do it again, Gotts says she would have given clients an idea of how long it would take to transfer assets between firms.
She and Sweeney were occupied with clients, working at least 12-hour days for the first three months. They met with many clients in their homes to make repapering as convenient as possible.
“We were bringing in new documents signed by cli- ents faster than they could process them in our office,” Sweeney says. Fortunately, the new firm allowed them to hire support for the transition.
With transitioning clients taking at least several weeks, advisors will likely have little revenue during the
IIROC rules require assets to be settled within 10 clearing days after the dealer transferring the funds receives an electronic transfer request form. If not, the receiving dealer can establish a loan from itself to the delivering dealer through a clearing corporation, among other options.
first quarter at the new firm. O’Hagan, whose transition took about a year to complete, says he experienced
a 40% to 50% drop in revenue in the first year. As is typical, the firm helped make up the shortage with a transition package. O’Hagan received guaranteed com- pensation for a defined period based on his revenue at the old firm, with a bonus for new assets as he built his practice at the new firm.
Settling in
Advisors also face an adjustment period with new sys- tems and colleagues. To help, Novachis’s firm has a dedi- cated relationship manager. “If you’ve got an issue, that person is chasing it down,” he says.
O’Hagan says learning new systems, software and tools, and integrating them into client processes quickly, took a lot of work. In meetings, he reminded clients that he was the same advisor and asked them for patience.
Client service should remain as seamless as possible, Sweeney says. “Even though it was a transition, clients didn’t know or probably care what’s going on behind the scenes,” he says. “They just want to know that every- thing we have been doing for the last five or 10 or 15 years is going to continue.”
After putting in the work required for a successful move, shorter-term challenges should eventually lead to longer-term success.
Gotts and Sweeney say they’ve grown their practice since their switch, a direct result of offering better ser- vice. Gotts says she can focus on serving clients through discretionary management, not through products. Fur- ther, clients have remarked on the firm’s efficiency,
she says, from onboarding and documentation to asset transfer and online access. The overall result has been an increase in referrals from clients, Gotts says.
Their only regret about the switch? “That we didn’t do it sooner,” Sweeney says. AE
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Top advice from advisors who switched
› Be organized/prepared (44%)
› Do what’s best for clients (33%)
› Conduct research (30%)
› Be ready to work a lot (27%)
› Don’t switch for the money alone (26%)
Source: Fidelity’s 2018 Advisor Movement Study (U.S. advisors)
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