What Happens When A Financial Advisor Changes Firms?

As a successful financial advisor, you’ve received dozens of messages 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 deleted the message, 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 was with a different firm?

Consolidated Planning helps experienced financial advisors grow bigger, better, and faster by using a planning philosophy and custom playbooks to launch your practice to that next level.

This article will discuss the logistical implications of changing firms as a financial advisor. You’ll learn what a change in firm can mean 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. This can lead to creating a more robust and consultative experience rather than the traditional transactional nature of the business.

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. This is important to fully understand based on where you are and where you’re looking to go.

 

Potential Disruption To Client Relationships 

Your move to a new firm can potentially disrupt relationships with your current clients. Regardless if that is just a perceived disruption or not, some clients may feel uncertain about the change and may need reassurance that their financial goals and needs will continue to be met.

You must actively and clearly communicate with your clients about the reasons for the change and how it will impact their relationship. For the better, we hope.

Providing 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. 

There’s no doubt that changing firms will change your relationship with your clients – now it’s up to you to decide if that will be a positive or negative change.

 

Changes In Fees And Compensation

With a change in firms, your fees and compensation will likely shift as well. This change can 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.

It’s important to note that today it’s an industry standard to charge a planning fee for doing business. 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. We’re sure you know this all too well. 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 You Change Financial Advising Firms?

Switching your financial advising practice to a new firm is not a quick fix. In fact, this period of transition will add more to your plate. But, just for the short haul. As an advisor, you need to set your sights on the future.

Ask yourself these questions:

What will happen if I change firms?

What will happen if I don’t change firms?

Your answer here can help guide you toward what is best for building the practice you’ve been dreaming of. 

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.

 

 

Exp. 12/2027

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Consolidated Planning, Inc. is an Agency of The Guardian Life Insurance Company of America® (Guardian), New York, NY. Securities products and advisory services offered through Park Avenue Securities LLC (PAS), member FINRA, SIPC. OSJ: 6115 Park South Drive, Suite 200, Charlotte NC 28210, Phone # 704-5528507. PAS is a wholly owned subsidiary of Guardian. This firm is not an affiliate or subsidiary of PAS. This material is intended for general use. By providing this content Park Avenue Securities LLC and your financial representative are not undertaking to provide investment advice or make a recommendation for a specific individual or situation, or to otherwise act in a fiduciary capacity.