How to pass the baton without dropping it.

The steady growth of your firm has brought you the experience of being the primary manager of too many client relationships and it is now time to hand off some of your clients to an underling-not just to unburden yourself and free up time for business strategizing and premium clients, but to develop your staff by giving them more responsibility. Easier said than done.

Says Michael Koenig, managing partner of FirsTrust LLC in Daytona Beach, Fla., "We've found that introducing a 'replacement' advisor is a sensitive process that must be slowly infused into the client relationship. Our past success with it can be largely attributed to our meeting face to face quarterly with every client, giving us repeated opportunities to phase in the new advisor."

Why the sensitivity? Because ours is a relationship business. Your first clients formed an allegiance to you, the sole practitioner, or "original CFP," within your firm. Then you hired other planners, and now you ask clients to trade that allegiance for a new relationship. For most clients, this is about as comfortable as wife swapping.

But it goes beyond mere discomfort for some. Inexplicably, these clients bonded with you from the moment of their initial call to the firm. They were referred by a friend or someone who knew you well enough to have instilled an almost premature feeling of deep trust in you. This prospect was just waiting to speak to you for the first time so he could confirm that trust. No wonder he is going to go to another advisor within your firm kicking and screaming; it was love at first sight when he met you.

And that is why you must carefully craft your strategy for reassigning clients. If you fail to take seriously this transition, you may alienate and lose some of the best ones. An effective strategy, says Koenig, "is to introduce 'additional' advisors, not 'replacements.'  The first planner can strategically introduce other planners into the client relationship [before a transfer takes place], thus adding value to the overall relationship instead of deteriorating it."

Yes, this is a version of today's much-heralded advice: Build a team, institutionalize your firm, make the clients and the firm less dependent upon you, the owner. And no doubt that's good advice for the larger firm. It's just that one has to get from here to there first, and it is in the process of expansion that the growing pain of client transfers must be dealt with.

Some advisors "sneak up" on the client with such a gradual change the client hardly sees it coming. William "Ike" Eichenberger of Harbour Pointe Financial Advisors LLC in Mukilteo, Wash., says "I decided to slowly transfer some of my clients to my CFP-certificant assistant to avoid client objections and provide him additional training. I meet with clients annually, so this year my assistant attended these meetings as an observer offering occasional comments. Next year both of us will meet with these clients and my assistant will run the meeting. The following year my assistant will be on his own, although I'll be available if questions arise."

Is there a way to speed up Eichenberger's time schedule? Stefan Prvanov of Blankinship & Foster in Del Mar, Calif., thinks so. "We let the assistant follow up with any action items or questions ... any opportunity to contact the client. We want the client to know that the planner is thinking about him and his situation. I've learned that clients will go directly to the person who can answer their questions or provide them with guidance." Prvanov says some clients will not accept reassignment, and the chemistry may not work between the client and the replacement. But, he adds,. "If you are able to reassign 90% of the group you want to reassign, you did great. The other 10% can be transitioned later and over a longer period of time."

Another variation on Eichenberger's approach is to include the associate planner in client meetings from the very beginning. Bert Whitehead, owner of Cambridge Connection Inc. and founder of the Cambridge Advisor network of fee-only planners, both based in Franklin, Mich., involves his associates in meetings and not only expects to transition his clients to them, but to have his associates leave with his clients-for a fee, of course.

Initially, the associate joins the meeting to familiarize him or herself with the client, begin the bonding process and handle follow-up tasks for Whitehead. Which is all by design. "I raise clients' fees steeply every three years," says Whitehead. "Those who object to the increase can elect to keep their lower fee by transferring to the advisor who has been teaming with me. Clients with whom I don't work well are faced with the highest fee increases to encourage them to switch."

Since each associate is on contract with a buy-out option after five years, they wind up paying Whitehead for his "B-list" clients-the ones who are small and/or difficult. Says Whitehead of his combined reassignment/transition strategy, "I've sold 16 startup practices to associates over the past 20 years for over $1 million in aggregate. I sell off my practice as I go along, and the people I hire give me a check on their way out the door." And it is all done on a friendly basis.

Yet another variation on the institutional theme is to assign each underling a specific expertise. Explains Gene Balliett who, with his wife Dee, runs Balliett Financial Services Inc. in Winter Park, Fla., "Dee and I are comfortable saying something like this when a client calls: 'Kathy is our in-house expert on IRAs and qualified plans. I'm just a general practitioner. So she can answer your question better than I can. I can transfer this call to her right now, if that is OK with you.' That approach has never failed to get a quick, favorable response from a client. The workload keeps sliding away from Dee and me, freeing up time for us to deal with newer clients."

And then there is the "lead planner" tact, as employed by John Henry McDonald of Austin Asset Management in Austin, Texas. McDonald decides whom a new client's lead planner will be based on information gathered by his receptionist during the client's first call to the firm. "Our initial meeting with the client almost always leads to the question, 'Who will I work with here?' We explain the 'initial lead planner' concept, and how the client is really hiring Austin Asset Management rather than any one financial planner. We've structured our business to create a flow of clients from practitioner to practitioner as time goes on," says McDonald.

Bob Wacker of R.E. Wacker Associates in San Luis Obispo, Calif., says, "For all new clients, I emphasize the team concept and tell them up front that if they insist on working with me, that is a deal-killer and they need to go elsewhere. Most still engage us." It's longtime clients who pose the biggest problem for Wacker, though. He deals with them by sending a carefully crafted letter explaining the need to transition them to one of his associates (see sidebar).

David Lewis, owner of Resource Advisory Services Inc. in Knoxville, Tenn., relies on the letter that accompanies his quarterly reports to clients to begin the process of acquainting them with new associates. Says Lewis, "First I tell clients that 'Bryan' is now with us, and I begin defining the ways he will be used in serving them. In each letter I make clear the work Bryan has done in [assembling their] report. I also let them know they can expect him to be working to impress them and I recruit the clients' assistance in coaching Bryan."

All of this is a preface to reassigning certain clients to Bryan, or to any new employee. "I have reassigned clients to planners before and talked with those clients after the planners were no longer   with us. None said they liked being reassigned. Some said they accepted the reassignment because they trusted me. Others told me they didn't want their relationship reassigned again."

Lewis says this is the biggest problem with the reassignment process: What do you do when a client is unhappy with the reassignment the owner has made, yet the owner knows he can't serve that client himself indefinitely? Lewis discovered what he believes is the solution to this dilemma: "I suggest to the client that the planner must win over his relationship. Clients seem to like that arrangement."

Lewis hit on this idea by studying the workings of his CPA firm. "My connection with my CPA firm is through one of the senior partners, but I often call others in the firm for a variety of tasks. I still feel like the senior partner is my primary contact, and I contact him sometimes on certain subjects. So, I asked him about this process." What Lewis found out from his CPA was that clients learn how to find the services they need within the firm, and the firm's staff works hard to maintain communications among themselves about each client so everyone is in sync on the client's affairs. In discussing this with his CPA, Lewis said, "If a staff person cannot win over the client relationship, you have probably hired the wrong person." His CPA agreed wholeheartedly.

Suffice it to say, reassigning clients doesn't have to be a dreaded event. Many advisors have found lots of ways to do it quite smoothly. Just borrow from their experience and you, too, should be able to devise a system that works for your firm.

David J. Drucker, MBA, CFP and financial advisor since 1981, sold his practice 20 years later to write, speak and consult with other advisors. Please visit www.daviddrucker.com for more information.