C2P

Multiply Your Time by Successfully Transitioning Client Relationships to an Associate Advisor

Published August 30th, 2019 in Blog |

You’ve been building your book of business as a financial advisor, carefully adding more clients and watching your revenue grow. And then it happens – you realize there just aren’t enough hours in the day to not only maintain your current client base but continue to grow it.

What do you do now?

Normally the first strategic hire is an assistant to help behind the scenes so you can add more clients while continuing to provide excellent service to the ones you already have. So, your growth continues…until you realize that once again you need to hire someone to help with the client load and all the tasks associated with it. At this point, you could consider adding associate advisors who can take on some of the client responsibilities and, eventually, take over some of the accounts as the primary advisor, allowing you to spend more time managing your growing business.

Finding and hiring good associate advisors comes with its own set of challenges. It’s difficult, it takes a great deal of time, and, let’s face it, you could end up training your eventual competition. You’ll need to find someone who is a good fit, whose personality blends in well with the existing staff, and who has the same professional goals as the other people in the firm. The new associate should be open to the proven processes that are already in place in your company and willing to work within those parameters.

Once you find a great associate advisor, how do you go about transitioning clients to them?

It’s hard to let go of clients whom you’ve nurtured because they regard you as their trusted financial advisor – but you must remember that taking care of your entire client base will prevent you from growing the business and the primary reason for hiring the associates is to alleviate your workload. The good news about transitioning clients is that you don’t have to do it overnight. For most firms, it’s a gradual, one-to-two-year process until the associate advisor takes over the account in its entirety.

What are the pros and cons of transitioning the accounts?

As with just about anything, there are upsides and downsides to bringing on more associates.

Pros:
• Hiring an associate advisor frees you up to work on larger cases and develop your business.
• It allows you to create a higher level of service for smaller clients because someone is focusing on them instead of letting the “big fish” get all the advisor’s attention.
• Associate advisors can uncover additional opportunities with the clients they manage, like Medicare, funeral expenses, etc.

Cons:
• If the associate advisor leaves, you will have to pick up the slack again.
• There is the risk of the client following the associate advisor if they leave, although that can be mitigated by an anti-piracy agreement in the advisor’s contract.
• Some clients will be unhappy about being handed over to an associate advisor.


One of the proven ways to move clients to the associate advisor is through the joint client review transition. There are specific steps to ease the client through the process of changing by incorporating these strategies inside of an annual review:

• Personally introduce the associate advisor to the client as your “right hand” on their accounts and request permission for them to sit in on the meeting.
• Create a “Meet The Team” handout featuring the original advisor, the associate advisor, and support staff. Use it to assure the client that there is a whole team overseeing their accounts. It is important to position this as an expansion of resources for the client. This approach also allows for easy replacement of any team member should someone leave the company – the team will still be there, with a replacement slotted into the open spot.
• Clarify the team members’ roles and reassure the client on continuity.
• Begin to build the associate advisor’s credibility with increasing responsibilities and direct client connection. Have the associate advisor actively participate in the review, and specifically discuss the client’s accounts themselves to demonstrate knowledge of their situation.
• Have the associate initiate further contact following the review to further boost the relationship and start adding value on their own.

These strategies will filter in during the three phases of a successful transition, which are the pre-review, the review itself, and the post-review. The last thing you want the client to do is feel like they’re being dropped. Proper planning and preparation by both you and the associate advisor will smooth the way and help avoid that type of reaction.

Pre-review, the associate advisor should follow a preparation checklist that looks something like this:

• Follow the normal process of gathering data for a review
• Review annuities to understand any riders and the general provisions of the program
• Review client data to ensure it is up to date
• Review AUM accounts, checking for alignment with risk tolerance
• Review last year’s notes, phone and action logs
• Determine potential beneficiary changes
• Add “Meet the Team” handout to the review packet
• Review any potential issues, beneficiary changes, past issues, and sales opportunities with the lead advisor

When the client arrives, you should greet them and introduce them to your associate. It’s important to establish immediate credibility by introducing them as your right hand on the client’s accounts and requesting their permission for the associate advisor to sit in on the review. This creates implied buy-in on the part of the client from the start. During the review, the associate advisor should be the one taking the notes and keeping track of any action items that need to be handled.

This is also a good time to introduce the team concept. You can use your “Meet The Team” handout to go through the team members and their specific functions when it comes to client care – positioning yourself and the associate advisor as being the two advisors on their team, plus an administrative coordinator, etc. – and present the team as an expansion of resources for them. This removes you as the single point of contact for everything the client needs and “trains” them to contact the other members of the team.

To really make this a successful transition, the associate advisor should add value by demonstrating their familiarity with the client’s accounts and situation. This will help the client begin to respect and trust the associate advisor and start a relationship with them. There are many ways to do this, but consider having them go over legal documents, update beneficiary information, review the prior year’s income tax returns, or make new investment recommendations. The closing, however, should be done by you, the lead advisor, for this initial meeting. You can ask for referrals, provide an invoice for services rendered, and summarize any follow-up that needs to occur. In future meetings, much or all of this can be left to the associate advisor; however, since the associate advisor has not yet “added value” in the client’s eyes, it would be difficult for them to ask for referrals just yet. You can also remind the client about the team resources available to them now – which leaves it open as to who will meet with them during their next visit, while not completely severing the relationship with you.

After the review, the associate advisor can further cement the new relationship by taking charge of the follow-up items. They should take the opportunity to send the client a follow-up email with contact information. This will reiterate the team approach and solidify the transition with a communication that comes from only the associate advisor.


Here are some do’s and don’ts to remember when transitioning a client to an advisor:

DO
• Position the change as an expansion of resources and a great advantage for the client.
• Reassure the client that you are still on their team and just a phone call away if they need you.
• Have non-piracy contracts signed by the associate advisor, meaning that they cannot take or contact clients or prospects of the firm should they leave the practice.

DON’T
• “Drop” your client to an associate advisor without having a transition conversation first.
• Use the word “handoff” when discussing the transition with your client.
• Tell the client that they have a new advisor. They don’t – but they do have a new associate advisor on their team.


When it comes down to it, bringing on associate advisors can be a mindset shift for you. As stated in the beginning, letting go of a client is difficult, but you must remind yourself that they will be better served with the team approach, and you will be free to seek out larger opportunities and manage your growing advisory business. Listen to our podcast and learn how hiring hiring and training great people will allow for your firm to continue to grow. It’s a win-win for everyone!

Have questions on how to bring on an associate advisor or how to best shift clients to an associate advisor? Get in touch with one of our business development experts today by completing the form below.

Dave Alison

Dave Alison, CFP®, EA is a founding partner of C2P Enterprises, driving a vision to help financial advisors across the United States simplify financial planning. Dave’s professional capabilities to coordinate tax, financial, insurance and estate planning needs are what led him to found Alison Wealth Management as a boutique tax, financial planning & investment management firm bringing household CFO services to affluent families & high-income professionals across the United States.