WEALTH MANAGER-Retaining clients when switching firms

* Articulating client benefits is the key to retention

* Clients should see how adviser is invested in the move

* A switch can help shed clients that aren’t a good fit

By John McCrank

TORONTO, March 3 (Reuters) – You’ve spent years as an
adviser building up a successful book and now an opportunity
has come along to help you take it to the next level. You’re
moving to another firm — but will your clients follow?

No matter what your reasons for moving on — newer
platforms, more autonomy, better backroom resources — there’s
always a risk that some clients may pass on coming along for
the ride.

The key to getting them on board is to make sure that every
decision you make in the transition process is client-centered,
said retail brokerage recruiter Mindy Diamond, president of
Diamond Consultants in Chester, New Jersey.

“You have to be able to communicate that it’s for the
clients’ benefit or the clients are not going to follow.” (See
factbox [ID:nN03244753])

That value proposition was the biggest challenge for Dwight
Jefferson, an adviser in Vancouver with a book worth more than
C$100 million ($103 million). He moved in September to
Macquarie Private Wealth, a unit the Australian financial
group, from CIBC Wood Gundy.

Because Macquarie’s retail shop was in Canada for less than
a year, Jefferson worried that some clients wouldn’t be
comfortable switching over from the long-established,
bank-owned firm where he’d been, in its various incarnations,
since 1996.

Once he made the move, he explained to clients what he
thought the new firm could offer them: a nimble management team
that was putting its money where its mouth was in terms of
building out its wealth management operations.

“You should be sure that the firm you’re going to can offer
your clients an uptick, because if it can, when you tell the
story, then the clients buy in and support you all the way,” he

In the end, he lost three clients. “But the vast majority
of the client base that I wanted to transfer came with me, and
in fact, I was pleasantly surprised about the level of loyalty
and support,” he said.


When Calgary-based adviser Neil Gregory and three
associates walked away from Wellington West in November 2009
after six years, they did it largely for the ability to manage
client money on a discretionary basis at their new firm,
Richardson GMP.

They saw the platform as a tool that could help them run
more efficiently, reduce volatility in the portfolios they
manage, and allow them to spend more time with clients.

“What we did is like what we always do when we’re looking
at stocks and bonds – we just evaluated what our choices were
out there and benchmarked that against what we had, and what’s
going to be a better fit for our clients and for our team.”

They told the clients what they thought they would gain by
the switch, and also what the team was giving up.

“We had all made investments into the private company’s
(Wellington West’s) stock and we were walking away from a gain,
because we get back what we put in, not what it’s worth,” he
said. “So they knew we were invested in the decision as well.”

A few clients decided to leave. But Gregory said that
presented an opportunity as well — it was a chance to shed
some clients who didn’t fit philosophically with the team.

“We left a C$6 million account behind. It wasn’t going to
be a fit, long term,” he said. “At the end of the day, we
didn’t miss it.”

He said the move forced the team to have serious
conversations with every client they wanted to take with them,
articulating exactly where they wanted to be.

“It’s an opportunity. It’s fresh. It’s not like you’re
knocking on their door and saying I want some more money from
you. You’re saying, ‘hey, this is where I’m going and this is
what I’m doing, this is what I’m building, and you’re part of
that process.’ You’re really engaging them in your business, as
opposed to just servicing their account.”

The value of Gregory’s book now stands at C$200 million,
from C$140 million when they made the move, with the new
platforms helping double their fee-based business and increase
year-over-year revenue by 35 percent.

“We’re two steps down a 10-step path of where we want to
take our business,” he said.

($1=$0.97 Canadian)
(Editing by Frank McGurty)