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Is there a way to move to a new firm that isn’t a grueling task for you and your client?

Advisor Transition During a Pandemic

The COVID-19 pandemic has rocked the global economy like the world has never seen before. Because prospects for the future seem unusually uncertain, it is understandable to expect clients to be more protective of their wealth.

But for advisors, a world-wide crisis may be an opportunity to jump to a new firm. Large broker-dealers like LPL Financial and Raymond James have seen surges in recruitment, especially among independent advisors.

Brokers and advisers who work as independent contractors are more amenable to leaving their firms during the COVID-19 pandemic and start anew because most of them have their own branches and offices, so there’s no need to switch physical locations.

As more advisors change affiliations, more clients will need to be transitioned as well. And when a financial advisor leaves a firm, it can amount to what seems like a divorce—a fight between the firm and the advisor over their mutual clients and their assets. The Broker Protocol has helped mediate between the parties, but not every firm has signed up and lawsuits are common when advisors try to solicit clients from their former firm. Being caught in the middle can damage clients’ trust.

And trust is important. The transition process will test the relationship that advisors have with their clients. Has the advisor created enough value to deserve the loyalty required for clients to agree to the transition? If so, the transition process should be designed to showcase the advisor’s value and demonstrate that the new broker-dealer invests in the latest technology.

How can wealth management firms gain more control over their advisor transition experience? We have found that there are three keys to successful transitions:

  1. Client experience (C/X)

  2. Speed and precision of account opening, and

  3. Proper support for compliance and suitability.

Focus on the Client Journey

Even if your clients have been with their advisor for decades, a flawed transition can send them searching for the next advisor waiting to pick up the pieces. The transition process is complicated and while most client trust their advisors, they do not all trust blindly. Clients want the captains of their financial journey to assure them of smooth sailing. Or at least warn them when they could be heading towards rough seas.

Firms should begin by creating a journey map that lists every touchpoint in the C/X, which is a large part of the advisor’s perceived value. A great C/X will boost client’s level of satisfaction. However, a poorly designed one can frustrate clients and damage the relationship.

The first touchpoint is when the advisor opens up the possibility for transition. Advisors should treat this approach like it’s a sales opportunity since a transition is high risk event that some clients use to switch advisors. Approaching clients with reasoning that clearly and convincingly communicates the benefits of transitioning to the new broker-dealer and explain that this is a trip that is worth taking.

When the client agrees to the transfer the receiving broker-dealer should have a controlled and manageable process that empowers everyone and is seamless and all digital. The number of times the client has to interact with the process should be kept to a minimum to avoid taking a lot of their time.

Best Practice: The most successful wealth management firms build their advisor transition process on top of the same technology as the rest of the firm’s digitized onboarding platform. When a different vendor provides the transition tools, both advisors and clients have to learn a new user interface that they will never see again. Leveraging the same technology ensures a single unified experience that reduces the learning curve for the rest of the software. Getting clients involved early with the firm’s technology opens a channel for building a stronger relationship.

There is a growing trend with Millennial's, after they mature into investors, they expect more transparency from their advisors. They are keenly sensitive not only to the client experience but also the operational processes, including reporting, financial planning, and trading. Millennial's want to understand more of the behind the scenes work. Advisors should engage and meet these expectations by providing more information about the firm’s operational processes. This is another opportunity to demonstrate value to a key client demographic.

Digitization Delivers Speed and Precision

There were 8,775 fintech companies in the U.S. at the beginning of 2020 and that number is expected to continue to grow as they expand into providing direct financial services to consumers. More and more parts of the wealth management experience are being digitized with associated benefits in speed and convenience that have revolutionized both client and advisor expectations. And there’s no going back.

In response, vendors developing tools for digital advisor transitions offer huge speed and precision gains for workflows and data analytics. Comparatively, keeping an analog advisor transition process just creates lengthy paperwork. Cumbersome paperwork can be a source of data errors, process delays, and lost revenues. Digital workflows eliminate tedious paperwork and the delays they create.

Despite justified nervousness, many advisors have already proven the hands-off transition model works. With few in-person options on the horizon to do business, advisors, broker-dealers, and clients will need to be open to new digital channels for engagement. But like millennial's are demonstrating, bridging the gap between advisors and clients through digital interactions is the desired future. Effectively leveraging a digital experience will be the new standard for retaining clients during transitions.

Incorporating Suitability & Compliance

Advisors need a well understood digital client journey map for more than client satisfaction. These maps must weave into the journey and considerations must be made for addressing both suitability and compliance standards. Numerous factors, including the rapid rise of robo-advisors has pushed both the SEC and FINRA to issue several guidelines regarding advisor transitions.

FINRA has reinforced the fact that investors are a client of the broker dealer, not the advisor, though the advisor carries the relationship. Broker dealers need to work closely with transitioning advisors to verify privacy protection and the suitability of proposed investments. These checks should also be incorporated into the digitized transition process.

Though some of the biggest names, mostly wirehouses like Morgan Stanley, Merrill Lynch, and UBS have opted out of the Broker Protocol, there are still 1,910 active protocol members that allow advisors to choose a new path without the threat of litigation.


While advisors contemplating transition should focus on client touch-points and enhancing communication, they can also consider revealing more of the behind-the-scenes operations to their clients who want more visibility. By engaging the clients early in the digital transition process, it will reduce their technology learning curve. Every step in the client journey should evaluated as to whether it increases trust and value in the advisor-client relationship.

The pandemic has increased the velocity of advisors switching broker-dealers and transitioning their client. Adopting digital tools that are tightly integrated with the firm’s onboarding technology will streamline the advisor transition process and provide an engaging experience for clients. These will both be necessary for firms to maintain growth momentum through the crisis and beyond.

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