With travel restrictions and advisors working from home, how can advisors conduct due diligence and change firms? Ultimately, it comes down to 2 key elements that haven’t changed: commitment and trust.
Despite the persistent challenges the pandemic has brought, the desire among advisors to best serve their clients and grow their businesses remains strong. And firms looking to attract top talent are motivated to make whatever changes necessary to showcase their capabilities, conduct home office visits and complete transitions.
Those advisors who are certain that the status quo is no longer serving them best – and have found a new opportunity which is “better enough” – are committed to moving forward. And while the processes differ from the way it was pre-Covid, what hasn’t changed is the faith that advisors place in the leadership of the new firm and/or custodian and the legal counsel advising them to ensure that the transition will go smoothly and seamlessly.
Certainly, making a move in the best of times requires courage, patience and flexibility—along with all the due diligence that precedes it. So how are advisors and firms making it happen at a time when travel restrictions, quarantines and office closures rule? Here’s what we’re finding…
Due Diligence and Home Office Visits
As wealth management businesses have found ways to make remote work efficient using technology, firms are now performing due diligence and home office visits (HOVs) via virtual meetings and video conferencing. The ability to conduct the due diligence process from the comfort of their home is actually the preference of many advisors citing that it saves time and provides greater confidentiality.
According to Scott Curtis, President of Raymond James’ Private Client Group, “Advisor interest and feedback from remote home office visits since early April has been quite positive. We’re proud that our very personal HOV experience remains flexible and translates well to a virtual engagement.” Yet, there are certainly some imperfections. Curtis goes on to say, “Virtual visits can’t completely replicate an in-person meeting at our headquarters,” because it’s harder to read body language and get the best sense of how people interact with others online than it is in person.
Most importantly, though, advisors conducting due diligence need to meet with the right people at the new firm to gain the confidence that their needs will be met, and that their business can be replicated. As Rich Steinmeier, LPL Financial’s Managing Director and Divisional President for Business Development shared in a recent WealthManagement article, “The truth is that so much of the home office visit is about information sharing and getting to know the firm’s capabilities better so they can make the best decision possible. We can still deliver the crux of that, and we can do that without them traveling to our facilities. The concept of the virtual home office might [even] extend past the end of the coronavirus crisis.”
The Transition Process
Many have read with great interest about moves being made in the last few months and wonder what the transition process was like. Brian Neville, an attorney with Lax & Neville who represents advisors who are transitioning, shared a positive perspective stating, “In the moves in which I represented the teams, the transitions have really gone smoothly. I’ve also been very impressed by the creativity and dedication that each receiving firm employed with each move.”
And it’s the combination of customization and ingenuity, plus a healthy reliance on modern technology, that ultimately drives the bus. One advisor who left UBS in March to launch an RIA found that the biggest challenge was not having actual people on-site to assist with the paperwork. But he worked with his custodian, Fidelity Institutional, and relied on DocuSign eSignature to complete the process.
In some cases where individual state guidelines allow, firms are able to put some boots on the ground and provide transition support in the way of in-person guidance. For example, in June, UBS veteran Matt Kilgroe launched Cyndeo Wealth Partners, a new firm in St. Petersburg, FL with the help of Dynasty Financial Partners and Fidelity Institutional Wealth Services. Since the business was located in a more “open” part of the state, this $1.2B team had the freedom to run their transition out of their brand-new office space with in-person transition teams from both Dynasty and Fidelity.
Because so many advisors report that they have deepened their relationships with clients throughout the Covid-crisis, they believe this will translate into increased confidence in the portability of their assets. This has served as a powerful driver of movement—particularly for those advisors who used the lens of crisis as the view through which they identified better ways to serve their clients and grow their businesses.
Chris Freimuth, who launched the Denver, CO-based independent firm Elk River in March, told ThinkAdvisor, “The current situation has oddly proven to be a blessing,” which allowed him to more easily contact clients, build relationships and remain connected.
Neville agrees that communication with advisors and clients has actually been easier for them during transition. “While a bit surprising at first, it turns out that a good time to switch firms is while working from home. Vacations aren’t happening so it has been easier for advisors to get in touch with their clients,” he said.
Additionally, for many folks, the pandemic served to inspire a “collective pause”—to refocus, reflect and regroup. Advisors are actually taking the time to assess their firms with a new perspective and asking themselves questions that they might not typically have had the time to consider before the crisis.
Is now the right time to transition my business?
Will this move be needle-moving enough to warrant the disruption in uncertain times?
And will I be comfortable making a transition through primarily virtual means?”
Yet the more things change, the more they remain the same. That is, the success of a move is primarily determined by these key factors: the depth of client relationships, the advisor’s commitment to serving their clients and their trust that the next chapter will be more than “better enough.” And it’s these elements which remain, regardless of the crisis.