When you’re ready to sell your firm, you are probably most excited about your next chapter, but also wondering how the transition will go after you leave.

You’ve dedicated your life to building your firm into what it is today, and you want to see it continue to be successful—and you want to make sure your clients are taken care of. 

At the end of the day, you will have sold your firm and what happens next won’t really be up to you, but there are plenty of steps you can take to maintain your legacy of trust and service with your clients.

Today, we want to talk through a few tips to help make the process easier on your clients as they transition to working with a new advisor.

Communicate Early and Often

Most acquisitions are a long time coming—both for the buyer and, especially, for the seller. As the seller, you have likely known the general timeline of when you would sell your firm for years (or even decades). 

As you near your retirement date, begin to let your clients know that it’s coming. Once you’re three or four years away, start mentioning it during every meeting in passing. At that point, no action will be required, but you’re priming them so they won’t be surprised when the time comes. 

Once you’re a couple years away from your desired retirement date, you will probably be proactively seeking a buyer and getting pieces in place so you can sell your firm. At this point, it’s important that you…

Be Transparent

As the details become firmer, let your clients know that actions are being set in motion for your retirement, but that you are doing everything in your power to set up your firm to run successfully without you. 

That being said, it’s important that you avoid sharing tentative details with your clients. Keep the finer details of your M&A to yourself until it’s a done deal. The last thing you want to do is leave your clients feeling like they’re being jerked around in the midst of such a big transition. 

You can still tell them when you are planning to retire, but important details like who is buying your firm, when it will happen and how it will affect your clients should be saved until it’s a sure thing.

Bring in the New Advisor for Multiple Client Meetings

This is an essential step in handing off clients no matter the situation—whether you’re retiring or just streamlining your client relationships. 

Make it part of your acquisition agreement that your clients’ new advisors will sit in on a set number of meetings with you. The buyer will most likely want this just as much as you will as it can go a long way toward improving retention, so it shouldn’t take much convincing to make it happen.

You can make a lot of progress toward a successful client handoff by following three steps with the new advisors. You should give yourself at least a year together to go through these steps, ideally more like two years:

1. Listen – During this phase, the new advisor should just be another warm body in the room during client meetings. You will need to introduce them, of course, but they are there to listen and learn foremost. This will allow them to understand your client relationships better and help your clients get comfortable having them around. 

The new advisor can start communicating via email and phone during this time with any follow-up that is needed, but you should still be running meetings yourself. 

2. Collaborate – During this next phase, you can let the advisor begin running portions of the meeting while you still maintain control. For example, you may still handle the portfolio review, but allow the other advisor to explain any suggestions you will be making. 

Be careful to avoid the appearance of disagreeing with the other advisor in front of clients. Again, if your clients sense that you don’t trust the new advisor, they will likely not trust them either. 

3. Hand-off – Let the new advisor start running meetings with you in the room. At this point, you’re just there as assurance that the clients are in good hands. 

You shouldn’t be handling anything at this point. If the client asks for your input, let them know that you agree with the new advisor and point the conversation back to them. If you appear unconvinced or doubtful in any way, the client will sense it. Doubt rubs off on others very easily when it comes from someone as trusted as an advisor.

Make It Clear You’re Handing Them Off to Someone You Trust

Your clients work with you because they trust you. Over the course of your relationship with them, you have proven yourself to be someone worthy of their trust thanks to your decision-making and practical guidance. Your recommendation means a lot to them.

Your clients are much more likely to work with an advisor you recommend than venture out on their own again to find someone new. Client retention is frequently cited as the biggest challenge of acquisitions, but the majority of acquiring firms find they are able to retain more than 60% of the clients they inherit. Of course keeping 100% of them would be ideal, but that is not the reality, and every firm experiences at least some attrition every year.

In short, how you talk about the other firm and each client’s new advisor can go a long way to keep that retention rate high.

If you make it seem like you are handing them off to a “junior” advisor or someone who doesn’t know as much as you, then alarm bells will immediately start ringing in your clients’ heads. 

Even if the advisor they will be working with is younger than you are, it’s important for you to make their expertise be seen as on par with yours to help your clients feel comfortable. A single off-hand, dismissive comment from you can speak volumes in how much a client trusts the “new guy.” 

Sure, if your clients decide to leave your firm after you retire, it doesn’t technically affect you in any way. Besides, it’s not your firm anymore. But it is your legacy, and we have yet to meet an advisor who doesn’t care about the quality of service their clients receive—even after they no longer own the firm.

Want to talk about how you can leave a lasting legacy at your firm after you retire? Contact us for a free consultation.