You've read the headline before: Billion-Dollar Team Moves to New Firm. But how much work goes into moving a giant-sized book of business?

Industry insiders say making the move isn't easy, and that it can take months, maybe years of research and effort before a team formally switches firms. And even after that, there's still a lot of work to do in bringing over client assets.

"The bigger the team, the more moving parts there are," says Mindy Diamond, president and CEO of Diamond Consultants.


What drives a team with a huge practice out the door?

"It's usually not driven by money because they are already making money," says recruiter Danny Sarch.

Although these types of teams may have exceptionally large books of business, they often share common complaints with advisors of all stripes, says Sarch. "The things that are bothering them are the things that are bothering everyone; it's pricing, it's discount policy, it's staffing, it's marketing."

Those factors are often followed by one final aggravation and another firm's offer to provide a more attractive work environment, explains Diamond, who helped move some of the largest teams that changed firms in 2014.

Recruiters say that the process of finding a new home could take anywhere from a few months to a years.

An advisor team, with about $1 billion in AUM and led by Tim Kneen and Clayton Hartman, left UBS in January to form IFM Capital Advisors with help from Focus Financial. Kneen said that they felt they could not serve their clients' best interests working from a wirehouse, and their frustrations "got to a point where it was unacceptable." The team spent a year evaluating their options before making a decision.

"We looked at every single opportunity on the Street," says Kneen.

In Howard Franzblau's case, the due diligence process was even longer. His team, which managed $900 million in assets at J.P. Morgan Securities, spent two years carefully considering their options before settling on Raymond James & Associates last week.

However, the process can move faster for some.

Diamond notes: "One of the teams I helped move this year, caught wind in April that their firm was going to change an important policy that would have a big impact. They said we need a plan B. They spent 6 months doing due diligence, and come Sept. the policy changed, and they moved in October."


A challenge for some teams is ensuring that everyone is ready to go.

"It's imperative, crucial to move the whole team. If you don't you're going to risk leaving behind some assets," says recruiter Rob Blevins, president of Rowlette Executive Search, who has helped mega teams move, including a billion dollar team this year.

Getting all the members on board can be tricky. But recruiters note that if a situation at their current firm arises, say policy changes or a bad branch manager irks one advisor, then it usually rubs the whole team the wrong way. And in the case of senior-junior advisor partnerships, it's often not difficult to convince the junior partner to jump ship.

Blevins explains: "Let's say you're a $2 million advisor and I'm $500,000. If we move together, we're now a $2.5 million team. I can piggy back off your deal. Well if they don’t move, now they won't be taking over that 2 million from that senior advisor. So it's kind of a no-brainer."

But whether in multi-member teams or two-person partnerships, it is critical that the principal team members agree on the course of action to take, says Diamond.

"Sometimes the due diligence process itself may force a team to split. We've seen scenarios where you have had a partnership that is not as solid as they thought, and all of a sudden one partner says I want to be independent while the other says I want a big transition check, and if both sides dig their heels in, then there's  a split," she says.


Jeff Spears, CEO of Sanctuary Wealth Management, a consulting firm, says that some advisors underestimate the challenges of transitioning their book of business. Mortgages, corporate loans, real estate and other investments might not transfer easily over to the new firm, Spears says.

"When you move, as trivial as those services might sound, the advisors are oftentimes surprised how sticky those banking services are," he says.

When making a move, teams of this size often also have to consider the nuances of their clientele: Are they expecting certain kinds of services and products?

"You have to find a firm that has the capability to serve a book of business that big, a firm with a pretty big back office, a firm that can get you the discounts you need," says Blevins. "If you have a clientele used to that service level, you need to stay at a firm that can offer it."


Once advisors formally make the move, they find themselves competing for their clients assets against not just their former firm but their former colleagues.

"Some might be your buddies, some might not -- but most are not. They will go after your clients. They are incentivized by your predecessor firm to go after your clients," says Spears.

Branch managers will often assign a departing advisor's clients to the best advisors in the office.

"It's a blood sport – it's a mad dash to get those clients to stay and we're trying to do the opposite, trying to get them to come join us at Merrill Lynch," said Halsey Smith, following his move to Merrill Lynch's Private Banking & Investment Group in April. He joined with his partner Howard Rowen as a $3 billion team.

Hartman and Kneen say they racked up a lot of hours and frequent flyer miles to meet with their clients and explain their decision to leave UBS.

"This is an important decision in their lives and our lives. So it deserved personal attention. We've built close relationships with these clients. You don't do it over the phone. You do it in person," explains Kneen.

Hartman adds: "When you're managing multiple generations of a family's money, that's a close relationship. It deserves more than a phone call. We needed to sit down with them."

Ultimately, most advisors transition most of their clients to their new firm, say industry insiders. The wirehouse, regional or roll-up firms recruiting big advisors often have specialized transition teams to help advisors with the move. Rudy Adolf, CEO of Focus Financial, says his firm spends a lot of time with breakaways up front to smooth out the process.

Branch managers are also keen to make sure that the recruited advisors are a success. A former wirehouse branch manager, who asked not to be named, says that bringing over a team like that is a huge win: "It's the kind of win that can keep your job."

How much of their book do most advisors transfer? About 75-80%, says Spears. "I've been doing this for 25 years, and that's been a pretty consistent metric." Hartman says that the response his team got from clients about their move was overwhelmingly positive. Some clients asked why they hadn't made the move sooner.

Clayton notes that the team transitioned about $750 million in assets following their departure from UBS. They expect to close the year with approximately $1.2 billion. 2014, he notes, is proving to be the team's most successful year ever. 

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