Now that you’ve bought a book of business, what happens next? If you don’t take the right steps, you could quickly find yourself dealing with more than you bargained for.
Some advisors don’t think about the effect of the purchase on their clients, their team or the business as a whole, says Joanne Ferguson, president, consultant and coach with Advisor Pathways Inc. in Toronto. If the integration of the new clients is not handled correctly, the advisor risks losing both clients and team members.
Buying a book of business is a complex process, with lots of details to work out before the transaction, says April-Lynn Levitt, a coach with the Personal Coach in Calgary. Important considerations range from making sure the new book is the right fit for your practice to ensuring that your own business is in order and able to handle an influx of new clients.
And the planning doesn’t stop there. Once you sign on the dotted line, there are still many things to do to keep your business operating smoothly. Follow these tips to stay on track when buying a book of business:
> Plan a transition period
Form a connection with your new clients by arranging a transition period with the exiting advisor.
If the original advisor can stay on for a while, or at the very least introduce you to top clients, he or she can act as a bridge between you and the new clients, says Levitt. The clients already trust their advisor’s judgment, so a bit of overlap can help them feel equally comfortable with you and your team.
Just make sure there is a firm exit date as part of the plan. Otherwise, Levitt warns, clients may never see you as “their” advisor and will continue to contact the original advisor.
> Craft a message
Create a way of explaining the transition to clients.
Come up with a script to use when talking with clients about the reasons for the change, says Ferguson. For example, you can explain that the exiting advisor is retiring or is leaving to pursue a new career path.
Try to communicate a message that makes everyone — the exiting advisor, the clients and you — comfortable, she says.
> Meet the team
If new members are joining the team, schedule a meeting to introduce everyone and clarify roles.
For example, if there are now two assistants on the team, you will have to work out how to divide up the work, Levitt says.
Levitt also suggests the team do personality or communication-style assessments to get to know one another and understand how they can best work together.
> Create a strategic plan
As a team, come up with a strategy to keep the practice running smoothly.
Plan out what steps must be taken to integrate the new clients into your business, says Levitt.
Also, Levitt recommends, create goals for the business together as a team. For example, a goal might be to meet with half of the new clients within the first two months of the acquisition, or to retain 90% of the book’s assets.
IE