Avoid These Transition Pitfalls

Now that you have your deal and are in the final negotiations, you must turn your attention to planning the transition of your business to your new firm. Moving firms is going to be a hassle for your clients no matter how well you plan it and how easy you make it for them. It goes without saying that the more complex your business, and the holdings of your clients, the more planning needs to take place.

The Protocol
The Protcol for Broker Recruiting is a document that outlines the guidelines surrounding the moving of Registered Representatives (RRs) between firms. Many brokerage firms have agreed to these guidelines by signing the Protocol. Others have not. Those firms who have not signed the Protocol do not permit ANY client information to be taken by the RR to a new firm and, likewise, will not permit any client information to be brought by any RR to their firm.

It is critical that you know what you can and cannot take so as to not violate any contractual points. It is possible that your former firm will attempt to place a TRO on your business in an attempt to slow your migration, effectively keeping you from contacting your clients.

Identify the Transition Team
Your new firm likely has a designated transition team. It will include representatives from your local office, technology support, administrators and your team. It is important to meet with the team as a whole to create a transition plan complete with action items, their due dates, owners, and a status box. Each person should have a defined role in bringing your clients over.

Client Segmentation
You have likely already completed the client mapping process. This occurs during your negotiations when the firm runs the names of your largest clients through their database to assess any potential duplicate coverage issues. At this stage though, you will provide a full list of your clients and have them all assessed for potential duplicate coverage issues.

You will need to segment your clients into “those to solicit” and “those to leave behind.” Of those you solicit, divide the client list into those you will pitch in person, those you will call, and those who will get a mailed announcement. You may want to send a mailed announcement to all your clients in advance of your solicitation but only you will know the best steps to take.

Your largest clients will require a detailed solicitation plan. Be sure you understand their issues with your former firm. Identify the team that you will need to meet with each client to close them; listing senior management and branch management where needed. If travel is involved, be sure to send a memo to your manager letting him know your plans and your request for senior management to join your trips. Expect your previous firm to be actively soliciting your client to remain with them. They will offer price concessions, entertainment tickets and more. You will need to be ready to counter if necessary.

Product Mapping
Be confident in your product knowledge and the comparable investments for each client. Some investments will be easily transferred via ACAT, others will require a liquidation and reinvestment. Be sure to address any tax consequences this will have on your clients’ taxable accounts. The more you know about what the transfer will mean for your client, the easier the conversation will be for both of you.

Documentation
Your SA should prepare comprehensive account documentation packages for each client. Have your SA complete as much of the information as possible on your clients’ behalf. Nothing is more annoying than having to write your name, address and Social Security number on every piece of paper. Some firms have this documentation down to a page or two, others require a tome.

Technology
You likely covered what the firm will pay for when you negotiated the finer points, but now you need to be sure your manager orders what you need. There may be lead time in certain products; the technology team within the firm will be able to take care of this.