6. Prepare client materials up front. As part of your preparation, you’ll want to invest some time and resources in formulating your new logo and marketing materials, as well as printing your new stationary, business cards and client brochures detailing your investment approach. It’s also a good idea to develop a press release announcing your new business that can be sent to the local media. As with other aspects of your business, this might be an area where you can outsource design, creative development and public relations to professionals with experience in the financial services industry.
7. Lay the groundwork with your clients. Ideally, as you transition to the RIA channel, you’ll be able to bring many of your best clients with you. In a survey by Cerulli Associates, advisors who transitioned to RIA sector were able on average to bring 91 percent of their targeted assets with them. Of course, your ability to migrate your book of business will depend on the loyalty and satisfaction of your client base, as well as the approach you take in laying the groundwork and talking to your clients about your plans.
Beginning about three to six months before your desired resignation date, try to schedule as many face-to-face client meetings as possible, focusing on your most valued, loyal clients. These meetings will provide you an opportunity to reiterate your commitment to your clients, and your interest in continuing to serve them in the future. During these meetings, make sure your clients have your personal contact information, letting them know you’re always available if they have questions. That way, if you must leave your firm abruptly or you’re constrained by non-solicitation terms, your clients still have a way to get in touch with you.
After you exit your former firm, and depending on the terms of your non-solicitation agreement, you’ll want to personally contact each client. Set up face-to-face meetings, and be ready to explain how your decision to becoming an RIA will benefit them. At each meeting, present your client with a personal welcome letter and marketing materials for your new firm, and have the necessary paperwork on hand. Explain that you’re eager to discuss some new strategies or products once they sign with you, and try to get their commitment during this first meeting.
8. Understand RIA compliance requirements. Whether they register with state authorities or the SEC, most RIAs are required to establish a documented compliance program that is customized to the practice and services being offered. As part of these requirements, you will need to provide each client with a Form ADV Part 2A brochure that provides a clear discussion of your investment analysis approach, fee structure and credentials. From a legal standpoint, it’s important that this document is carefully constructed and regularly reviewed by qualified counsel. Moreover, you’ll need to make sure that all of your marketing and client communications materials, disclosure documents and investment and trading procedures are consistent with this document. You’ll also need to be certain that every account you manage, regardless of size, receives a consistent investment process and detailed attention to required documentation. While some RIAs hire a dedicated compliance officer to handle these tasks, others have relied on outside consultants or strategic partners to handle this important part of their business.