Anyone who's ever switched jobs — or entered into marriage — has thought "this isn't what I expected." Often, advisers join a new firm with high hopes of serving their clients better while also growing their business, only to become disillusioned and disappointed.
Critical subtleties can make or break a transition. From my own experience talking with advisers and witnessing transitions, here are four areas advisers should thoroughly investigate but rarely do.
1. Does the firm provide centralized portfolio management? If so, to what degree?
Advisers who want to grow a book of business need to be ready to welcome more clients — and more client complexity. The old "rep-as-portfolio-manager" service model is dying out because advisers simply cannot build and maintain quality relationships while handling the day-to-day task of managing client portfolios. Newer service models place the adviser at the forefront of a team of experts.
Reliance on a team is what enables business to scale. For example, a centralized portfolio management team should carry responsibility for trading, monitoring, rebalancing, modeling tax impacts and more. Many advisers do these activities very well. But they simply cannot do them as thoroughly as a centralized team, or at scale, while also helping clients navigate complex planning scenarios.
2. Who is responsible for completing and processing client paperwork, from initial onboarding to ongoing service requests?
I often hear advisers talk about their struggles to onboard clients — both existing and new — when joining a new firm. Get specific in your questions about that process. Will you be responsible for putting together transition plans for each client? Will you prepare client-onboarding paperwork? Has the firm automated its processing?
If you need to manually process initial paperwork, don't underestimate the time required and the hassle for both you and your clients.
With respect to ongoing service requests, is there a team in place to receive and act on inquires in accordance with the plan you established with the client? Advisers get bogged down when they have to process routine requests one by one — even when delegating some of the resulting tasks.
3. What systems and tools are in place and, more importantly, how exactly are they used?
Do not make the mistake of asking about technology and presuming you understand how systems are actually used or that you would be licensed to freely use tools. That's a recipe for severe disillusionment. Ask for a demonstration and/or to see live output.
Also, don't assume that a firm's systems are speaking to each other. Lack of integration likely means double-entering data. Full integration across CRM, portfolio-management, reporting and other systems saves time while also reducing errors and complexity for clients. Also, modern CRM systems offer workflow and marketing campaign automation, freeing up additional adviser capacity.
4. What, if any, marketing and lead-generation support do advisers receive?
Effective marketing support can assist advisers both in finding and retaining high-value clients. Will you have access to well-produced educational events where meaningful conversations can happen? Will an active and unique content marketing plan help position you and the firm as attuned to everything from tax law changes to an inverted yield curve? A consistent, visible brand presence provides support for an adviser's own prospecting. And it certainly is a bonus if a firm has a lead-generation program in place to receive a flow of referrals from allied firms.
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Of course, there are myriad other issues to address when contemplating a move, such as compensation, collaboration and culture. These are also critical, but they tend to be better understood. That's why the most unpleasant surprises tend to arise in areas advisers hadn't thought to investigate.
Jim Baka is the President of Calamos Wealth Management.