As a trusted financial advisor, your client relationships are the foundation of your business. Many advisors we talk to have worked with their core clients for years, with decades-long relationships not an uncommon scenario. What is all too common, however, is a situation whereby advisors make changes to their business in pursuit of greater ownership — and are met with the harsh realization that the historical data long utilized to illustrate clients’ performance history must now be sacrificed due to portability limitations. This stands to negatively impact clients’ trust, which was likely hard-won — and isn’t always easy to regain.
Take the example of landing a high-net-worth client early in your career. Maybe you were working at a wirehouse at the time. Several years in, you make the move to an independent broker-dealer, and then down the road you launch your own RIA — a familiar career path for many. That high-net-worth client trusts you implicitly and has moved with you every step of the way. You’ve been diligent about managing their considerable portfolio and have delivered great results. But what if that valued client wanted to sit down with you to understand how they’ve performed over the last 10 or more years, and you were unable to easily answer their request because you lacked access to the requisite data?
Unfortunately, in an era of consolidation and rapid change, that reality is increasingly common for advisors. Though it tends to be a more noteworthy problem for portfolio management data than CRM, there are three recurrent situations where data portability limitations may pop up as an unpleasant surprise:
1. Breaking away
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Whether you are considering moving away from a wirehouse to an independent broker-dealer or RIA, changing relationships from one IBD to another, or starting your own RIA, it’s quite possible that you’re forced to “reset” your client’s performance history at each step. This data loss can occur due to non-solicitation agreements or lack of data authorization by the previous entity to pull history from the source system or custodian.
2. Custodial changes