What Happens When A Financial Advisor Changes Firms?

As a successful financial advisor, you’ve received dozens of calls from recruiters attempting to lure you away from your current firm with promises of greener pastures elsewhere. Whether you took the time to explore your options or clicked to end the call, at some point, a seed was planted that made you wonder about what would happen if you changed firms.

Would life be better if your practice partnered with a different firm?

Consolidated Planning helps experienced financial advisors grow bigger, better, and faster by using a comprehensive planning process and unique financial advisor support resources infrastructure. Our systems and tools create efficiencies that act like rocket fuel to launch your practice to the next level. When working with experienced financial advisors, we help by developing custom playbooks designed to triple your practice’s value within five years using our proven process.

This article will discuss the logistical implications of changing firms as a financial advisor. You’ll learn what a change in firms means for you, your clients, and your practice so you can make an educated decision about your next steps.

Changes In Service And Product Offerings

When a financial advisor moves to a new firm, you may have access to a different range of financial products and services. This is particularly true of any proprietary insurance or investment products. Conversely, your new firm may offer products that your previous firm did not provide. This could lead to changes in your investment strategies and recommendations to your clients.

At Consolidated Planning, many experienced advisors choose to join our firm to help expand their financial planning services. Our planning process for individuals, families, and business owners creates new service opportunities and allows you to do comprehensive work with your clients. 

If you previously focused primarily on investments, you may dive into conversations about insurance and vice versa. Additionally, many of our advisors also add comprehensive planning services versus remaining transactional.

While most firms offer relatively comparable financial products from an investment and insurance product perspective, the ease with which you can transact that business may vary from firm to firm.

Consolidated Planning differentiates our offering from other firms with the planning processes we use to organize, protect, and focus our client’s resources toward their goal.

Implementing a new planning process takes deliberate effort. The Advisor Performance Group at Consolidated Planning helps to reduce this learning curve and keeps you focused on managing your client relationships.

Potential Disruption To Client Relationships 

A financial advisor’s move to a new firm can potentially disrupt your relationship with your clients. Clients may feel uncertain about the change and may need reassurance that their financial goals and needs will continue to be met.

You must clearly communicate with your clients about the reasons for the change and how it will impact their relationship. You may also need to introduce your clients to new team members or associates at the new firm to ensure a smooth transition.

Consolidated Planning has helped countless advisors transition their practice from one firm to another. Clarity around why you changed firms and how your new firm will positively impact your clients is essential. In most cases, the benefits to clients will include a comprehensive planning process and an enhanced client service model. 

Changing firms will change your relationship with your clients. How you prepare to change firms and the why behind your decision will determine if that change is positive or negative. 

Keep your ideal clients in mind when evaluating firms and make a choice that is best for them as well as you.

Changes In Fees And Compensation

Financial advisors are compensated through either commissions or fees. If you change firms, you may switch from one model to another. This could impact how you are compensated and how you are motivated to serve your clients. 

For example, an advisor moving from a commission-based to a fee-based model may need to adjust their business practices to ensure that they generate sufficient revenue from their clients. 

On the other hand, an advisor who is moving from a fee-based model to a commission-based model may need to be more strategic about the financial products and services that they recommend to their clients in order to earn higher commissions.

Many advisors at Consolidated Planning choose to charge financial planning fees. This change in compensation ties into a change in service model and can be very effective for growth when relaunching an established practice at a new firm.

Legal And Regulatory Considerations

Financial advisors are subject to a range of legal and regulatory requirements in order to practice in their field. When you move to a new firm, you may need to undergo additional licensing and regulatory processes to continue practicing. This could include obtaining new certifications or completing additional training. 

The advisor may also need to update their professional liability insurance to cover any potential risks associated with their new role. You need to understand and comply with all applicable legal and regulatory requirements to avoid any potential issues or problems.

One of the biggest potential legal and regulatory issues you will face during your transition to your new firm involves client data and is governed by the broker protocol. This agreement between member financial institutions dictates what client information you can and cannot take with you when you move from one firm to another. 

Find out if your current firm and new firm are members of the broker protocol and consult with legal counsel to ensure that you remain in compliance to avoid any potential legal issues.

What Will Happen When I Change Financial Advising Firms?

You read this article because you’re a financial advisor weighing your options. There are tons of firms out there and their recruiters are aggressively trying to fill seats with promises of a better life on the other side. A number of factors determine which firm is best for you. 

But only you can determine what is best for you.

Reach out to our team today to learn more about how Consolidated Planning will help you evaluate your options, transition your practice, and experience exponential growth.

 

 

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