In the first part of this series, we discussed those preparations a successful buyer makes before entering the marketplace to bid on a practice. We looked at the practice of Kristofor Behn, president of Massachusetts-based Fieldstone Financial Management Group LLC, who bought 90% of my client base in 2001. In the second installment, we looked at the ways in which Behn promoted himself to the top of my list of would-be buyers. Now let's find out what he did to retain the vast majority of the clients he bought.

And before we address that question, let's understand why we're focusing primarily on client relationships: Because they're the most valuable piece of the business. Some buyers just buy the client relationships; others buy equipment and leases, and continue to employ seller staff persons. But the greatest value comes from the clients. The present value of their expected fee income, which hopefully will continue well into the future, is far greater than the market value of any other company asset you have purchased.

So the first thing you must do is familiarize yourself with your new clients. Sure, you have studied the overviews given to you by the seller during your negotiations. But now that you actually own the clients, you need to absorb many details about their relationship with the seller (depending upon how long they were clients of the seller prior to their purchase, of course).

Ideally, this information exists not in multiple paper files but in computer records. The modern advisor collects critical client information in a client relationship management (CRM) program like Junxure-i or ProTracker, including scanned images of client documents (e.g., tax returns and estate plans), client correspondence and e-mail back and forth between the client and advisor. This level of organization and ease of retrieval makes your job, as the buyer, far easier than plowing through volumes of paper that may be improperly filed, missing or, in the case of handwritten notes, illegible.

In fact, the form in which client records were kept by the seller and will be transferred to you is a major negotiating point often overlooked by buyers. Do not fail to estimate the additional work involved in dealing with paper vs. digital records, and the cost thereof, when bidding on a practice. Also, carefully assess the amount of detail the seller has available. When we buy a used car, we want a copy of every maintenance receipt so we know not only what specific repairs were made but, more generally, how the car was cared for. It's the same process with clients; records are ideally detailed enough to give us a feel for the personal nature of the relationship, not just what transactions the seller executed for the client.

By digesting this information, you'll know more about your new clients than just their net worth as you meet them for the first time. You should have a broad knowledge of them-how long they worked with the seller, what have been his major accomplishments for them, what have they valued most about the relationship, what is their family makeup and how far down and across the family tree has the seller's influence spread, what are their current issues and goals, and so on.

The familiarity you'll gain by reading your clients' files will be your foundation for establishing your own relationship with them, a process that must occur as a series of in-person meetings. If you have clients who trust you and value your advice enough to pay you a fee each quarter to be their financial advisor, you know what it took to develop each of those client relationships. For most of us, the average developmental stage is about one year. Through meetings, particularly the more intensive and frequent planning sessions most of us engage in with a new client, everyone usually feels pretty comfortable with each other after about 12 months, on average.

Human nature being what it is, a buyer will find it difficult to accelerate this process much, except for one factor: he's been heavily endorsed by the seller. The seller has said to his clients, in so many words, I think so highly of this individual (i.e., the buyer) that I want to be his partner. "What," you say, "the seller's going to be my partner? I thought I was buying his clients!" You are, but you're going to be partners during the transition process. Ideally, you are going to work closely together for at least a year, maybe two, as you meet these new clients together, as some of their trust for the seller rubs off on you, and as they eventually get the same warm feeling about you they already have for the seller.

"Can't we just tell these clients I'm buying this guy's practice and that they're now going to work with me instead of him?" you ask further. Not if you want to keep the vast majority of them for the long haul which, according to David Grau, president of Business Transitions Inc. of Portland, Ore. If you or your seller believes the hard work is done once you close your transaction, you're being naive. Client retention will depend almost entirely on what happens one year out from that date.

So plan to get in front of these clients frequently. If the seller has a meeting schedule for clients that's any less frequent than once per quarter, find reasons to meet more frequently with them during this critical phase. Every in-person meeting is a chance to advance the bonding process between you and the clients.

As time goes on during that first year, use every opportunity to insert yourself in the process. When you, the clients and your seller join together in meetings, you and the seller should be sharing the meeting-that is, leading the discussion and answering questions. Later in the first year, you should be playing an even more prominent role, with the seller sitting by quietly and speaking up merely to clarify points or assist occasionally with an answer that you may be struggling with. You are a team. The clients see you as such, and are developing ever-greater confidence in you. And they like you personally, too, because after several meetings they've learned things about your family, your hobbies-things not directly related to your competency as an advisor.

The counterpart to frequent meetings during the relationship-building phase of the transition is a rapid response system. If you don't already have such a system, you should implement one that allows all of your clients to find you easily. Nothing builds relationships faster than frequent contact, and ease of access is a prerequisite. Therefore, you should consider having a toll-free phone number, an easy-to-remember e-mail address and a "find me" phone service. The latter is a service, such as Freedom Voice Systems (www.freedomvoice.com) or EasyTel (www.easytel.net), that essentially follows you wherever you go, trying your office phone, cell phone and home phone sequentially. You have total flexibility as to how you program the system, and you also can preview callers to determine whether calls are clients or solicitors.

Other kinds of "virtual" systems can improve your accessibility and response time, as well, which becomes particularly important if the client base you are buying is geographically widespread. In the case of my own sale, my clients were located in the Washington, D.C., metropolitan area and in New Mexico, and a handful had scattered themselves about the country as long-term clients often do, moving to the sites of new jobs or to retirement communities. It's necessary to meet and stay in touch with these clients as well, even though a lack of geographic concentration makes it more difficult.

Although it's advisable to make the investment in traveling to meet these clients in person once or twice early on in the transition, as Behn and I did, staying in touch thereafter will depend more upon e-mail and phone contact than it will with other clients. If these widespread clients, and other new clients as well, are computer literate, you can increase their feeling of connectedness by setting up a client-access Web site in which clients can find continuously changing communications from the buyer-seller team, communications that-like in-person meetings-eventually shift to being signed by you alone.

In my own transition I remain listed on Behn's site as an officer of the company, but ex-clients now understand I'm doing behind-the-scenes marketing for the firm via my writing. They've all formed close relationships, first with Behn and later with the employees he retained from his second advisory firm purchase in 2002, so that my old clients seldom ask for me anymore. If they do, I will occasionally call one to say hello. Does the seller really want to be involved, even peripherally, three years after the sale? If he has financial incentives he does, but that's a whole 'nother article.

The last piece of the relationship-building puzzle to consider, if you have far-flung clients as Behn did, is to set up a local presence, or office, where those clients are concentrated. Behn maintained a Washington, D.C., office in an executive office suite center for one to two years following our transaction. Clients could take comfort from the commitment made to an office right in their midst, in spite of his company being headquartered in another state.

Remember, close personal contact as much as competent advice is what binds all clients to us, so you can't go wrong in following this same formula for newly acquired clients. The only difference is that you're trying to accelerate the bonding process to coincide with the date that the seller is contractually allowed to disassociate from the buyer's firm completely. All of the above strategies will help you accomplish that.

David J. Drucker, M.B.A., CFP ([email protected]) and a fee-only financial advisor since 1981, is a principal in Practice Merger Consultants Ltd. (www.practicemergers.com), and editor of the Virtual Office News monthly newsletter (www.virtualofficenews.com).