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Transitioning advisors—whether leaving a wirehouse or IBD to start their own firm, or to join an existing firm— will need to repaper their book of clients to the qualified custodian leveraged by the new RIA. This repapering process is always the most daunting task for any transitioning advisor. Why? Because it requires contacting each and every client and inconveniencing them for not just one signature, but several.
In speaking with advisors contemplating a move, we do our best to set their expectations and highlight the work they have ahead of them. Many advisors will push back right away and say, “You don’t understand—I have a relatively simple book. I only have 100 clients, and they love me! They will sign whatever I ask. It will be painless.” They are envisioning a “simple” spreadsheet with 100 rows, containing name, address, phone number and email address for each client. What they don’t realize is that spreadsheet must track account applications for the new custodian, not household applications—if each of their clients has, on average, five accounts per household, their mental spreadsheet has just grown from 100 rows to 500 rows before we’ve collected any data.
Further, these advisors are failing to appreciate that beyond just basic contact information for each...