01 What Triggers the Need to Transition Clients to a New Advisor?
Transitioning clients between advisors within a financial firm can be a challenging and emotionally charged process. Whether you’re a senior advisor looking to move into a CEO role, managing the burnout that comes from decades of client reviews, or preparing for retirement, having a well-defined system in place ensures that clients remain well-served and your firm operates efficiently.
Take, for example, Erin Scannell, who, during his career, grew his firm to $4 billion in assets under management and handled up to 800 clients at one point. Eventually, Erin realized that in order to grow further and ensure the highest quality of service, he needed to transition his clients to other advisors.
For many advisors, transitioning clients can feel overwhelming and emotionally draining. After all, you’ve invested years building trust with these individuals. The key is creating a process that minimizes client concerns, leverages the strengths of your team, and ensures continuity of service.
In this article, we’ll explore a step-by-step process to help you systematize client transitions, leveraging insights from experienced coaches Steve Sanduski and Amy Koenig. This process not only strengthens client relationships but also ensures the long-term success of your firm.
02 Why a Well-Planned Transition Enhances Advisor Confidence?
The first step to successful client transitions is meticulous planning. You’ll need to clearly define the goals of the transition, segment your clients, and ensure that both the incoming advisor and the rest of the firm are fully aligned.
Segment Your Clients
Begin by creating two lists:
- Key Clients: These are high-value clients who are critical to the long-term success of your firm.
- Non-Key Clients: These are clients who may not generate as much revenue or require as much attention but still deserve quality service.
The segmentation process should go beyond asset size or revenue generated. It’s equally important to consider the nature of the relationship—how well you connect with them, their likelihood of providing referrals, and their overall fit with your firm’s culture. It’s essential to focus on more than just numbers when determining your transition approach.
Conduct a Client Knowledge Transfer
One of the biggest challenges in transitioning clients is ensuring that the incoming advisor has all the knowledge and insights you’ve built up over the years. To facilitate this, conduct a “brain dump” session with the new advisor.
During this session, share important details about each client that may not be recorded in the CRM. Consider recording this conversation, summarizing it, and storing it within your CRM system for easy reference. This step helps minimize the client’s concern that they’ll have to “start over” with a new advisor, as the incoming advisor will be equipped with the personal details that foster trust.
Develop a Comprehensive Communication Plan
It’s vital that your entire team is aligned on the communication strategy for the transition. This includes a consistent message for why the transition is happening and how it will benefit the client. For example, if you are stepping back into more of a CEO role, your narrative might highlight how this will allow you to focus on the firm’s strategic direction, ensuring long-term value for all clients.
The communication plan should also be personalized for key clients. Tailor the messaging for clients with unique circumstances, such as those who have multiple family members as clients of the firm.
03 How to Ensure Client Trust Remains Strong While Executing the Transition?
Once you’ve completed your planning, it’s time to implement the transition. This involves introducing the new advisor, holding joint meetings, and gradually shifting client responsibilities.
Introduce the Advisor in Joint Meetings
A great way to begin transitioning clients is through joint client meetings. For key clients, introduce the advisor during regular review meetings rather than scheduling separate transition meetings. This provides a more natural, comfortable introduction to the incoming advisor.
Over time, the advisor should take on a more prominent role in these meetings, leading parts of the conversation. This will help the client become familiar with their new primary contact. As you plan the meeting, involve the new advisor in setting the agenda to foster their leadership development and deepen their understanding of the client’s needs.
If you are a retiring advisor, you might use a script like the sample below. But, please note, you’re not going to use this verbatim. It’s just an example and you should modify it, add to it, subtract from it, and use your own voice.
Sample Script:
[Client Name], as you know, I’ve had the privilege of being your financial advisor for [X] years now. We’ve worked closely together to build and manage your wealth, and I’m proud of all we’ve accomplished.
As I approach retirement age, I’ve been giving a lot of thought to our succession plan. It’s positive for all of our clients to ensure the longevity of the firm.
I want you to know that I have no plans to retire completely anytime soon. However, in the interest of ensuring a smooth and well-planned transition, I am going to start reducing my time commitment over the next couple years. My plan is to cut back to 50% time.
The good news is that I have an extremely talented team here that I’ve been working alongside for many years. That’s why I named the firm {Firm Name}, not {Advisor Name} (e.g., Joe Smith Wealth Management)- because it’s not about me, it’s bigger than who I am. It’s about the strength of the entire team.
You know [Advisor Name]. [He/she] has been with me for [X] years and is an outstanding advisor with deep expertise in [areas of focus]. I have complete confidence in [his/her] abilities. Over the next [time period], I’d like to start/continue having [Advisor Name] join our meetings and become more involved in leading our relationship. My goal is to have [him/her] become your primary advisor over time, with me still being available for strategic guidance and advice.
I want to assure you that you aren’t losing me; you’re gaining [Advisor Name] and the entire team. I’ll still be here, but [he/she] will be your main advisor contact. This will allow me to ensure I’m giving you the high level of service you deserve even as I step back my time commitment.
I’m fully committed to making this a seamless transition for you. [Advisor Name] and I will be working closely together on your behalf. My top priority is making sure you are comfortable and confident with this transition plan.
By delivering the message this way, it frames the transition in a positive light and provides reassurance to the client that they will continue to receive the highest level of service and guidance. The client should feel they are in good hands with the new advisor and the transition plan.
Gradually Shift Communication to the New Advisor
Once the introduction is made, begin shifting communication to the new advisor. This can include:
- Updating email signatures to include both advisors’ names, with the new advisor listed first.
- Directing client inquiries to the new advisor whenever possible.
Ensure your internal team is trained to manage this shift effectively. If a client calls the office and asks for you, the team may want to gently guide them to the new advisor instead, reinforcing the message that they will receive equally excellent service.
Deepen Client Relationships
The new advisor must go above and beyond to build a strong relationship with the client. This can be done through proactive communication, recognizing important client milestones, and regular check-ins. Even simple gestures, such as sending a birthday text or inviting the client to a lunch meeting, can help build trust.
If your firm doesn’t already have a client service matrix that outlines touchpoints and expectations for client communication, now is the time to create one. Set clear expectations for how often clients should be contacted and by whom.
04 Why Client Feedback Helps to Make Improvements to the Transition Process?
The final stage of the transition process is ongoing review and refinement. This includes gathering feedback from clients and making any necessary adjustments to improve the process.
Gather Client Feedback
As the transition progresses, solicit feedback from clients to ensure they’re satisfied with the new advisor. This can be done through formal surveys, phone calls, or in-person check-ins. Be mindful of negative feedback and address concerns promptly to avoid client dissatisfaction.
Conduct Regular Debrief Meetings
Hold regular debrief meetings with your internal team to discuss how the transition is progressing. Are clients adapting well? Is the new advisor confident in their role? What can be improved? These discussions will help fine-tune your transition process, ensuring smoother transitions in the future.
Make Adjustments to Incorporate Feedback
When transitioning clients to a new advisor, it’s natural for clients to have concerns or objections. Addressing these early and proactively can make the transition smoother and more comfortable for everyone involved. The key is to approach objections with empathy and provide clear, thoughtful responses that reassure the client while emphasizing the strengths of the transition plan. Below, we explore some helpful analogies to explain the process and offer solutions to overcome common client objections.
Using Analogies to Explain the Transition
Analogies can be a powerful tool to help clients understand the transition in a way that relates to their own experiences. Here are five examples of analogies that can simplify complex ideas about the transition:
- Financial Planning Analogy
You know how we’ve been working together to create a comprehensive financial plan for you? We started with a strong foundation and then built upon it over time, making adjustments as your life and goals changed. Well, I’m doing something similar with my own practice. I’m laying the groundwork now for a smooth transition in the future, so that no matter what changes, your financial well-being will always be secure. - Investing Analogy
In investing, we always talk about the importance of diversification—not putting all your eggs in one basket. Well, I’m applying that same principle to my practice. By bringing in [Advisor Name] and having [him/her] work closely with me on your account, we’re diversifying the expertise and perspective you benefit from. It’s a way to manage risk and ensure continuity in your financial care. - Business Succession Planning Analogy (for business owner clients)
As a business owner, I know you understand the importance of having a strong succession plan in place. You want to ensure that the company you’ve worked so hard to build can thrive even when you’re no longer at the helm. I’m doing the same thing with my practice. [Advisor Name] has been working with me for the past [X] years to ensure that when I step back, they’re ready to step in and continue to deliver the level of service and advice you’ve become accustomed to. - Entertainer Analogy
You know how in Broadway shows the performers change over time, but the story remains the same? We’re making a similar change here as I step back and make room for the next generation of leaders to lead the firm. - Relay Race Analogy
Transitioning my practice is a bit like a relay race. For many years, I’ve been running the race, carrying the baton, which represents the responsibility of managing your financial well-being. As I look towards the future, I know it’s time to start planning for a smooth handoff. That’s why I’m bringing [Advisor Name] in as my relay partner. We’ll be running together for a while, and then when the time is right, I’ll pass the baton to [him/her].
These analogies help frame the transition as a well-thought-out, planned, and positive experience. By using language and concepts that clients are already familiar with, it becomes easier to explain the process and build confidence in the new advisor.
Overcoming Potential Objections
During a transition, clients may have specific objections or concerns about working with a new advisor. Below are five common objections and suggested responses to help reassure clients and keep the conversation positive.
- Objection: I’m comfortable with you, {Advisor Name}. I don’t want to work with someone new.
Response: I completely understand. The relationship and trust we’ve built over the years are incredibly important to me. That’s why I’ve put so much thought into this transition plan. [Advisor Name] isn’t new to me or to our firm—we’ve worked closely together for [X] years. [He/She] shares my values and approach to financial planning. I’ll be working side-by-side with [him/her] to ensure that you receive the same high level of service and advice you’ve come to expect from me. And I’ll still be here, just in a more strategic role. I’m confident that as you get to know [Advisor Name], you’ll come to trust and appreciate [him/her] as much as I do. - Objection: I’m worried that I’ll be getting less experienced advice.
Response: [Advisor Name] is an outstanding advisor with [X] years of experience in [areas of expertise]. [He/She] has been an integral part of our team for [X] years and has contributed significantly to the success of our clients. I have complete confidence in [his/her] abilities. Remember, I built this firm on the principle of providing the highest quality advice—I wouldn’t be transitioning you to [Advisor Name] if I didn’t believe you would be in excellent hands. It’s not that you’re losing me, you’re gaining the rest of the team.” - Objection: Will my fees increase with this change?
Response: Absolutely not. Our fee structure will remain exactly the same. This transition is about ensuring you continue to receive the best possible service and advice, not about changing our fees. We remain committed to providing value to you and being transparent about our costs. - Objection: I’m worried that my investments will be handled differently.
Response: [Advisor Name] and I share the same investment philosophy and approach. We’ve worked together for many years to develop and refine the strategies we use to manage our clients’ portfolios. [He/She] has been involved in the management of your investments alongside me. You can expect the same disciplined, thoughtful approach to your portfolio management, aligned with your goals and risk tolerance. - Objection: What if I don’t like working with [Advisor Name]?
Response: I understand your concern. It’s important to me that you feel comfortable and confident with your advisor. That’s why I’m proposing a gradual transition, where [Advisor Name] and I will work together with you over [time period]. This will give you the opportunity to get to know [him/her] and develop a relationship. However, if at any point you feel that it’s not a good fit, please let me know. My priority is ensuring that you receive the best possible service. If necessary, we can discuss other options, including exploring another advisor within our firm who might be a better match for you. Your comfort and confidence are paramount.
By addressing client objections head-on and offering thoughtful responses, you not only ease their concerns but also reinforce the strength of your transition plan. The use of analogies can be particularly effective in helping clients relate to the process in a positive way, while clear, empathetic communication ensures that clients feel heard and supported throughout the transition. Ensuring clients are comfortable with their new advisor is the key to a successful, long-term relationship moving forward.
05 How a Successful Transition Benefits All?
By implementing a well-structured client transition process, you can free up time, reduce stress, and focus on what matters most to your firm’s long-term success. While the emotional aspect of transitioning long-term clients is real, a solid system ensures that both clients and your firm benefit from the change.
Systematizing your client transitions not only supports your firm’s growth but also ensures clients receive the highest level of service, regardless of which advisor they work with.
Amy Koenig is a financial advisor coach and the Chief of Operations at ROL Advisor. To hire Amy to help you make your office operationally efficient, enhance your client experience, and increase your profits, start by completing our brief business assessment.
