There are many reasons why financial advisors make a move from one firm to another. It could be money, it could be product offerings, it could be how the firm is managed, or just personal preference. Often the decision to move isn’t an easy one, but it may be the best decision a financial advisor can make for themselves and their clients.
One of the main concerns of financial advisors who decide it’s time to switch firms is whether their clients will follow. And, of course, tied to that is, will they lose money. If you consider the advice below before making a switch, you should worry less about losing clients along the way.
According to a study by Cerulli Associates, approximately one-fifth (19%) of client assets are lost when advisors change firms. But, as studies go, there are those in the field who question the statistics, such as Ryan Shanks. In Shanks’s recent article for FA-Mag.com, he states that based on his 21 years as an advisor recruiter, he has not known of an advisor losing 19% of client assets during a transition. However, he does stress the importance of other factors that may contribute to this statistic, such as an advisor’s lack of due diligence in ensuring they’re joining the right firm—a firm that is positioned to help the advisor grow, is aligned with their values, and will provide an overall improved client experience.
In a recent blog, we explored the importance of the client experience, and it is worth exploring further as it relates to advisors switching firms.
In a 2019 RIA Intel article, Gary Stern talks about Jonathan Miles, a Certified Financial Planner who spent seven years honing his craft at several broker dealers before gravitating to a Sarasota, Florida-based independent wealth manager, with a dozen financial advisors and $700 million assets under management. Miles made the move from a broker/dealer to an RIA, not for the money, but to work as a fiduciary and serve the best interests of his clients. According to Miles, moving from a broker dealer to an RIA was like “moving from an individual sport to a team sport.” At broker/dealers, Miles felt everyone looked out for themselves, but at the RIA, his clients are helped by a team of experts who share information on operations, client service, and financial planning.
When considering a move, a financial advisor should consider the impact on their clients first and foremost. If switching firms will provide more choice, better quality of service, and an overall improved client experience, then it may be a good fit and abate any concerns of losing your clients. But as mentioned above, financial advisors must do their due diligence.
As an independent financial services firm, Visio Wealth Partners is passionate about providing unparalleled support and resources to our advisors so they can build wildly successful businesses while helping their clients improve their financial success. We go above and beyond to help our advisors maintain their independence while providing the resources they need to grow and prosper. If you’re an advisor looking to switch firms, contact us today to learn more about our practice.
