ORLANDO, FLA. Inheriting a retiring advisor's book of clients is a quick way for advisors to boost their business, even double it.
But don't underestimate the amount of work that goes into it, say advisors who have been through the process. It takes enormous patience and effort to get up to speed on so many new clients.
"It was like being a rookie again," says Cliff Mulder, a Raymond James advisor in Kalamazoo, Mich., who participated in a panel discussion on the topic at the firm's summer development conference.
The most important aspect of this kind of transition is the clients, who will want to know that they are still going to get the full attention of the new advisor. Luis Garcia, a Raymond James advisor in Huntsville, Ala., says he made a point to have face-to-face meetings with the new clients, looking for the simplest reasons for a meeting.
"'Oh, I have this form I need you to sign. Can I come and stop by?' I absolutely made up reasons to go and meet the client," he says.
Garcia notes how hard it can be to get to know so many new clients so quickly: "The relationship you build when establishing an account is so much deeper."
Mulder jokes that all 85-year-old clients look alike when you didn't prospect for them yourself. He suggests getting the retiring advisor to help with the getting-to-know you process.
"I'd have Bob [the retiring advisor] stand next me at client events, and I'd see that 85-year-old couple start walking up to us. Bob would lean in and say, 'Those are the Coates.' And I'd be able to say, 'Hi John and Helen,'" Mulder says.
The bottom line is that the clients don't feel they're being cast aside.
"Let those clients know that you are enthusiastic to be their new advisor," he says.
Advisors should also be prepared to learn, as the new book of business may bring some significant differences from their own. For example, Garcia says that the advisor who transitioned his book of business over to his, worked on a number of annuities with his clients.
"I had to spend a whole lot of time understanding why he did them, what was the benefit to the client," he says.
Mulder adds that even if you have similar investment styles and client bases, there will still be variations client-by-client.
"The client is going to want to know that you looked at their portfolio and understand their portfolio. So it's definitely a time investment," Mulder says.
Indeed, advisors should be prepared for a time-intensive process. You'll be spending a lot of hours collecting notes on clients and making sure you understand their investments and portfolios, Garcia says.
"My main concern [at that time]: How was I going to take another $110 million and start managing that?'" Garcia says. "There were a lot of long days. I lowered my social expectations to none."
But, he says, the efforts paid off. And Garcia recommends other advisors not hesitate about approaching another advisor in their branch, who may be nearing retirement.
"If you're not on a team, then I would certainly think about approaching someone because I guarantee you that they are thinking about it," he says.
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