Practice Management

By Leah Golob |

Moving to another firm may be a way to help accelerate your career. Maybe you have begun to plateau in your current  position and have found another organization that offers the products, services and support you are looking for. Or perhaps moving to a new firm is a way to increase your client roster by taking over the book of an advisor who is retiring from that firm.

While there may be benefits to moving, as with any change, there is potential for mistakes and unwanted surprises.

Sometimes advisors move to a new firm without examining the "big picture," says Rosemary Smyth, founder of Rosemary Smyth and Associates in Victoria. They don't consider the profound effect such a change may have on their careers. A bad move can be costly — both financially and personally — so you will need to do your homework beforehand.

Here are three mistakes to avoid when changing firms:

1. Assuming you will buy a book of business right away
Some advisors move to another firm with the intention of buying another advisor's book of business. As a result, they don't put any effort into marketing and prospecting to earn their own clients once they arrive, Smyth says.

Even if you have made arrangements beforehand, your purchase of a book might not go according to plan, Smyth says. For example, if an advisor has agreed to sell you part of his or her business, they may be passing off only their bottom-tier clients. So, you will still need to do your own marketing to build your client base.

2. Underestimating the transition period
Moving to another firm is a complex undertaking that will probably take longer than you expect. All your marketing materials, your website and your social-media profiles will have to be revised to reflect your new firm affiliation.

If you are bringing existing clients with you, they will have to adjust to your new brand. If you are taking over another advisor's clients at the new firm, you will have to meet those clients and get acquainted with their accounts. You will have to establish how the transition process will occur with the exiting advisor, and how you will communicate that process to your clients.

3. Assuming all your clients will come with you
Some advisors overestimate the proportion of clients — and assets — that will follow them to a new firm, Smyth says. Often, clients are reluctant to switch firms if there is a market downturn or if they have already established a connection with the firm's brand.

Says Smyth: "There is a risk that you will lose as many clients as you would gain at the new firm."

This is the second part in a two-part series on switching firms.

Click here for part one.