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3 Steps I Took to Switch Firms in a Pandemic

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Moving a financial advisory business to a new firm is a major undertaking, no matter when you do it. Making that move while the economy is shutting down and markets are tumbling amidst a global pandemic is a special challenge.

I shifted my business to Rockefeller Capital Management in the middle of March, and my timing could have been better. It was a stressful period for everyone, especially for my clients, many of whom own their own businesses and had unique challenges through the start of crisis.

Still, now that the transition is mostly complete, I can say it has gone remarkably smoothly. The move worked because we followed some three rules that would apply in any economic environment.

What were they?

1. Let your clients know what they can expect.

Transitions like this don’t happen overnight. Some liquid assets, like brokerage accounts, can move to the new firm quickly.

Annuities, on the other hand, may take four or five weeks. Hedge funds, loans, insurance – each one has its own timetable. It is critical to communicate all that to clients so they know what to expect every step of the way.

In our case, we used an aggregation tool with a dashboard that let clients see exactly when their assets moved from one firm to the other. This helps clients get a real-time view of where their money is.

We also told people we would have to recreate files of their personal information because we couldn’t bring them with us.

That involved some long telephone conversations going through basic details like birthdates and addresses, which clients were fine with because we were transparent about the whole process upfront.

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2. Make it clear there were compelling reasons for the switch.

My new firm is a great fit for my clients and I let them know why. The firm is independent and private and has been serving high-net worth clients since the 19th century. It has a long time horizon.

The story resonated with my clients, many of whom have owned their own companies for a long time. At Rockefeller, my clients will have access to a range of alternative investments.

They can invest directly in operating companies, not just funds. As private markets become a bigger piece of the investment universe, that opportunity will be more important.

Finally, there are people at Rockefeller I have known for a long time and I respect their track records, and knew my clients would too.

The bottom line: This move wasn’t about me. It was about finding the right home for my clients and their assets.

3. Engender trust ahead of time.

It requires a leap of faith for staff and clients to join you at a new firm. They will make that jump only if you have earned their trust over time.

Many of my clients have been with me for over two decades. I have guided them through other tough markets — the technology selloff in 2000, the financial crisis of 2008, and other periods of significant volatility.

If you take care of people, help protect and grow their money, and give them good service, they will be clients for life.

The same holds true for associates in my business. They have to feel that they will be valued at the new firm.

My new firm was very helpful in that regard by including the staff on important phone calls. The firm treated us like professionals, not rookies, which is the way it should be done.

They also did a good job training us to use their information systems for everything from managing accounts to running performance reports to marketing to new clients. In the end, my team felt comfortable and respected.

I can’t say that the entire transition was completed without any hitches. In that first week or two, as the whole U.S. economy was getting used to working remotely, we encountered a few small delays.

On the plus side, I was pleasantly surprised by how few of my clients’ positions had to be liquidated. More than 95% of their holdings were able to be transferred.

While some might view the current climate as a poor one to be starting out, I would disagree. I have found that difficult periods can be a good time to market your practice, because the competition is reluctant to put its money to work.

The experience of the past weeks has taught me some simple lessons: that if you build your business right, and that if you communicate openly and often with your clients and co-workers, you can make a transition to a new firm that works for everyone, even in extraordinary times like these.

(Join ThinkAdvisor’s webcast series on Volatility, May 26-28, for insights and best practices to help navigate the impact of COVID-19. Register Today!)


Andrew Horowitz, CEPA,  is a Private Wealth Advisor at Rockefeller Capital Management.