7 Ways Clients Can Benefit from an Advisor Transition

What motivates top advisers who drop the ball to risk disrupting the momentum by making a move? There’s no doubt that every advisor wants to improve their ability to grow their business. But ultimately, most will share that the quest to provide more – and better – service for customers drove them to take the leap.

Wendy Leung

Sometimes the catalyst is a push, meaning feeling limited by the company’s platform or pressured to sell standardized solutions that may not be optimal. For others, it’s an incentive or a desire to do more for customers by becoming a true fiduciary and improving service, support, technology and communications in the process.

So, for advisers who want to make sure a move passes the test in terms of offering “more for their clients”, it is essential to ask a simple question: “What does this bring to my clients? ? »

This is the most important question advisors should ask themselves before making a move, as it is the first question they will need to answer when announcing the change.

It is therefore essential that the due diligence process provides the answer with clear and significant customer benefits identified along the way.

To do this, our advice is to assess the new company or model against these 7 criteria:

More support
Clients want a responsive, personalized advisor who focuses not just on investments, but on their entire financial life. To provide this level of service, counselors need sufficient support staff.

In distribution positions, the level of production a counselor must reach to earn a fully paid support person keeps increasing. In contrast, regional firms typically provide more paid support staff, while in the freelance space, advisors have full control over expenses and can hire an optimal team.

More investment flexibility
A truly open architecture with the ability to “shop down the street” for best-in-class investments is a hallmark of the RIA space and a benefit to customers, as greater investment flexibility translates into greater customization of client portfolios.

But is there a benefit when advisors move from one W-2 firm to another? Absolutely – like a broader SMA platform or more sophisticated alternatives and structured products. And in the case of some high-end boutiques, there is access to unique private offers and alternatives not usually available at larger companies.

More Services
Today, clients are looking for a “financial quarterback” who can advise them on all aspects of their wealth. So the ability to provide a truly holistic offering, including not just investments but tax planning, family office services, trusts and the ability to advise on assets held, is seen by clients as a real benefit. This is also one of the main advantages of the RIA space since these companies are free to offer a full range of services tailored specifically to the needs of their customers.

Is this possible in a W-2 environment? Yes. Private wealth management groups within leading connection houses offer advisors access to specialist teams and an expanded suite of premium resources for their ultra-high net worth clients.

Boutiques also offer a more holistic offering since the platform and resources of these companies are organized to meet the needs of a select group of affluent clients and the advisors who work with them. Along with a compliance environment that provides greater latitude (possible because they manage a small group of experienced, high-performing advisors), this results in an environment that allows for both a broader service offering and a more great customization.

Cost reduction
This one is very clear: the ability to cut costs is always a win for customers.

For advisors moving into the traditional employee space, cost reduction can be achieved by finding a company that eliminates minimum pricing on small accounts, offers more competitive pricing on SMAs, or better rates and terms of ready. By contrast, a move into the RIA space gives advisors full control over spending and the ability to shop the streets for the best prices on everything.

This can result in substantial cost savings, which can be passed on to customers.

Better technology
As technology advances, customers demand an intuitive and comprehensive technical experience, such as a customer portal with a user-friendly interface accessible via any device and offering up-to-date information.

Some regional and cable companies have prioritized technology investments and therefore offer advisors a modern and fully integrated technology suite. Unfortunately, others are way behind, underinvested, and tied to cumbersome legacy systems that just don’t keep up. This forces advisors and clients to settle for systems that are at best inefficient and at worst lacking in capability.

The approach in the independent space is very different. RIAs have access to state-of-the-art technology available from third-party vendors and can create a truly customized technology stack based on their specific needs.

Less bureaucracy
How does this benefit the end customer? It’s simple. If an advisor can reduce the number of hours spent on administrative tasks and without multiple layers of management approvals, they can be more responsive to their clients’ needs.

Large companies tend to have a lot of bureaucracy and heavy compliance requirements – a byproduct of managing a huge force of advisors. Small businesses, especially boutiques, some regional and independent, are more flexible, with fewer layers of management to navigate and less onerous compliance.

Advisors who transition to a practice with less bureaucracy gain more time, which they can then use to focus on improving service and being more proactive and available to their clients.

Communicate better
The ability of advisors to communicate quickly and effectively, both individually and en masse, has become more important as clients now expect real-time information and responses.

Unfortunately, to get approval on something as simple as an email update in a fast-paced market, some advisors have to go through such a cumbersome process that by the time the email is approved , the content is obsolete. Other advisors may be restricted to handing out only company-approved canned materials, with no personalized commentary.

A decision that allows advisors to freely communicate their views and differentiate their approaches makes them and their information more accessible to clients.

Ultimately, a successful move hinges on finding a better home not just for the business and advisor, but for the clients as well. So keeping the idea of ​​“what my clients get out of it” in mind during due diligence will ensure that you have a clear understanding of how a new business could shake things up for everyone.

And, when you pick up the phone to tell clients about the transition, you’ll be in a good position to help them see that the short-term disruption of the move will pay off with long-term benefits.