When buying a book of business, it’s important to have a detailed plan in order to get a handle on your new clients and make the transition a success.
“If you have a solid plan in place, most clients will stay with the practice,” says April-Lynn Levitt, a coach with the Personal Coach in Calgary. In contrast, without a proper plan, you face the risk of losing clients.
Follow these tips to make sure your practice is ready to take on a new business:
>Have resources in place
Make sure your office is prepared to take on the responsibilities of a new book.
Levitt says you need to ask yourself the following: “Do I have time to look after all these new clients with the existing staff that I have?”
If not, ensure you either hire staff to help with the new clients — or consider taking on a smaller portion of the book.
>Interview new staff
In addition to new clients, you may also be bringing on team members from the retiring advisor’s practice. In those cases, you need to make sure they are the right fit for your practice.
Avoid a costly and time-consuming mistake by interviewing any associates or assistants who plan to join your team from the retiring advisor’s practice, says Levitt.
>Forget that they’re family
Always keep the transaction professional — especially if you are buying a business from a family member.
Arrange the transition as though you and the retiring advisor are not related, says Levitt. For example, each of you should have your own lawyers look at statements related to the transactions and write down detailed descriptions of roles and responsibilities.
>Make changes slowly
Take your time if you plan on making significant changes to the business.
Sometimes, when advisors take on a new book, they want to change the practice to a new model — to fee-based from commissions, for example, says Lloyd Williams, an executive coach with lloydwilliamsinc.com in Lunenburg, N.S. In those cases, unless you have a strong endorsement from the exiting advisor, any changes should be done over a period of time. Do not make any major changes immediately after the transition as that could upset clients.
How long the transition takes depends on the clients you are working with and your skills of persuasion, says Williams. In general, the transition can take between six and 18 months.
>Conduct a review
Take some time to evaluate the process after the transition is complete — especially if you plan to buy other books in future. In fact, it’s a good idea to sit down and review what went wrong and what worked, says Levitt.
IE