Transition support — the assistance that a company gives to a recently recruited advisor as he or she moves a book of business into the firm — is vital to the continued smooth operation of the advisor’s practice and his or her ability to retain clients.

Yet when Investment Executive asked brokers, planners, account managers and insurance advisors to rank transition support in importance and rate their firm’s performance, the respondents gave transition support an overall importance score of 8.7, but their firms a performance score of only 7.6.

“Transition support is top of the list of priorities when you decide to switch firms,” says a Raymond James Ltd. advisor in British Columbia.

An advisor with TD Waterhouse Private Investment Advice in Ontario agrees: “It is critical for brokers at that stage.”

In fact, in each of the four channels of the advisory business, firms almost universally fall short in terms of the transition support they deliver. The shortfall between delivery and expectations indicates that firms could be doing more to meet their advisors’ needs.

Transition support, whether an advisor moves to a new firm or elects to remain with a firm that has been acquired, is important because of the logistical complexities involved in switching companies, including paperwork and learning to use the new firm’s systems. Also, the move must be made in a way that appears seamless to clients.

The process is time-consuming and can be expensive in terms of lost revenue. So, many firms compensate new advisors financially to account for the drop in income.

Of the four business segments, firms in the brokerage group were most successful in meeting their advisors’ expectations when it came to transition support. Winnipeg-based boutique dealer Richardson Partners Financial Ltd. posted the highest transition support score, 9.6, in the survey overall.

SWAT TEAMS

“The process was unbelievable,” raves a Richardson Partners advi-sor in Toronto. “It was organized and smooth. It took two months — with 12 people hired by the firm to handle the paperwork and logistics.”

Many brokerage firms, including TD Waterhouse, employ so-called “SWAT” teams of administrative help to ease an advisor’s move to the new firm.

“Everything is set up,” says a TD Waterhouse advisor in Ontario. “All the broker has to do is get on the phone and talk to clients.”

Financial help comes either in the form of a signing bonus or as an enhanced payout to cover the transition period. Tim Price, president and CEO of Montreal-based MacDougall MacDougall & MacTier Inc. , prefers the latter. “We typically like to pay an enhanced payout, because we believe it gives the new advisor incentive,” he says. “We are prepared to offer a signing bonus if we think the advisor should expect a fair transition payment.”

However, even in the brokerage channel, advisors at a number of firms that were surveyed say they are disappointed by their transition experiences.

“The firm wasn’t ready for me, and it turned out to be a bit of a disaster,” says a Canaccord Capital Inc. advisor in Alberta. “It was slow with communication, and I had to do a lot myself.”

Other Canaccord advisors, however, must have had better experiences with their moves because the firm scored higher (8.5) than the category average.

Insurance firms that participated in the survey generally provided adequate transition support, their insurance advisors report.

Sun Life Financial (Canada) Inc. , which posted an above-average transition support score (8.0) for the category, receives plenty of praise from its advisors for the financial support it gives advi-sors who are new to the industry. The company, formerly known as Clarica, has set up an account from which new advisors can draw when their monthly revenue falls below a certain level.

“It prevents advisors from dropping out in the first two years,” says a Sun Life advisor in Ontario.

SHORTCHANGED ON HELP

Some advisors with Guelph, Ont.-based Co-operators Group Ltd. , which earned a score of 7.2 in transition support, thought they’d been shortchanged when it came to receiving help when they arrived at the firm.

“There is no transition support. You just have to start all over again, from the beginning,” says a Co-operators advisor in Ontario.

There are plenty of complaints from advisors at several of the planning firms about the quality of their company’s transition support. Some gripe that their firms didn’t follow up on promises made to them when they started, while others say that what support they did receive was ad hoc and poorly delivered.

@page_break@“Transferring from one firm to another is a painful experience,” acknowledges Joe Canavan, chairman and CEO of Toronto-based Assante Corp. , which received a score of 6.2 in transition support. “It can take anywhere from six to 12 months, and you don’t do as much business as a result.”

Assante’s financial support for recently transferred advisors comes in the form of a transition bonus, Canavan says.

Advisors at the retail level of some of the banks and credit unions were the most critical of the transition support they received.

“They hire you and throw you right in,” says an advisor with CIBC in Ontario. “That doesn’t seem to work too well.”

CIBC scored 5.4 in transition support, the second lowest mark of all the companies surveyed.

“You’re thrown into these roles,” says an advisor at Royal Bank of Canada in Alberta, whose firm scored a 7.8 in transition support. “There’s so much turnover here that you can’t turn to anybody for help because they’re new, too.” IE