Transitioning your book of business or going independent are questions that many financial advisors ponder.
Many who switch firms often boast about it being the best decision they have ever made but not without experiencing some level of frustration due to administrative details resulting in loss of client assets.
Lost Client Assets
Since client retention is a critical contributing factor to success and renewal income, many financial professionals find themselves wondering:
- How many clients will realistically move with you if the transition process is disjointed or takes too long?
- How many ‘Tier 1’ clients will you be in jeopardy of losing?
A new study by Cerulli Associates examines the often unspoken downside [of transitioning a book of business] — client attrition and loss of client assets. On average:
- Approximately 19% or one-fifth of client assets are lost when advisors change firm affiliation, in addition to planned attrition.
- Advisors lost an additional 10% of their client assets due to planned attrition, defined as assets that an advisor chooses to leave behind; hence, they relinquish close to 30% of client assets on average.
Administrative Challenges
Firms typically control the information that an advisor can take to a new firm, which can negatively impact client retention and often result in declined client assets.
Fidelity Clearing & Custody at Fidelity Investments surveyed brokers moving between brokerages — those moving to the independent channel and registered investment advisers moving among independent firms — to discern the most unexpected challenges of their moves.
The amount of paperwork involved was the top unpleasant surprise, followed closely by the length of transition and challenges preparing clients for the switch to another firm.
Technology Challenges
Another difficulty that surprised advisors who moved is related to technology issues, which could be attributed to the fact that many firms are paperless. Yet, the account transfer process is often not. The amount of paperwork associated with transferring a book of business is tremendous.
A Solution to Make the Transition Process Easy & Efficient
Here at OnBord, we understand your concerns and have developed technology to make the transition process easy and efficient.
- Rather than taking an excel sheet of households to be forced to reach out to them manually to gather private information and ultimately open up accounts, you can simply load this information into OnBord.
- As soon as the transition is official, you can send out the OnBord to every household by email, explaining why you are transitioning and why it benefits them.
- Finally, and most importantly, have them fill out the account opening information straight through their mobile device/desktop.
Not only does OnBord make life easier, but it also gives you a better opportunity to continue your relationship with a client, as you can manage the progress of their completion and a text cadence to remind them to complete the onboarding process gently.
We welcome the opportunity to give you a free, no obligation demo of OnBord. Schedule your demo today.