In 2011, advisor Michael Andersen wanted a change.

So over the course of a year, he and partner Darren Midgley began shopping for a new home for their book of 250 clients.

The pair, based in Mississauga, Ont., spent hours eating in high-end Bay Street restaurants, sampling expensive wine and listening to slick sales pitches from other large firms.

But they finally clicked with a suitor at an ordinary coffee shop, during a meeting with Richardson GMP’s chief executive and his team.

“They asked a lot of questions about us,” recalls Andersen. His first impression: “Everyone’s so normal. I just wanted to work with normal people who were trying really hard.”

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Maglan Naidoo, an Edmonton advisor, was also looking for something new, and joined Canaccord Wealth Management about two years ago. He’d built up a $32-million book of business at two large institutions, but decided to jump to Canaccord because he’d grown frustrated with pressure to move proprietary investment products. “I was pretty unhappy.”

Since the switch, his practice has grown to $52 million. “It’s been the best move I’ve made so far,” he says, attributing much of the growth to being able to offer new investment vehicles and money managers.

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Other advisors yearn for the freedom to take positions in alternative investment vehicles, such as private-equity deals or private REITs.

Adam Woodward, a Calgary-based Macquarie Private Wealth advisor, made his move to better tap into private-equity deal flows and financing.

But such changes are by no means risk-free: clients don’t always follow their advisors, especially if they have other ties to the institution.

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In fact, switching is a lengthy process that requires an extensive due diligence process (see “Doing due diligence,” next page), advance planning, and then a highly focused effort to bring clients along for the ride.

Advance preparation

Some firms tell advisors to expect to lose up to half of their asset bases when they pull stakes. But while you’re looking, you’re not allowed to tip off clients.

Instead, shore up relationships in advance of a change. Before he’d made up his mind about the move, Andersen asked clients to complete customer satisfaction surveys to get a sense for what was and wasn’t working within his practice.

That’s important, because switching firms gives clients “an opportunity to revisit you,” he adds. What’s more, after an advisor leaves, the previous firm will notify clients by letter, phone and email to try to persuade them to stay. So make sure you’ve got good reasons for clients to follow you.

Toronto advisor Wynn Harvey, a Macquarie vice-president who joined the firm last year, says her team gave clients advance notice that a change might be in the cards, and then sounded them out for feedback.

Pulling the trigger

The actual moment of transition requires detailed planning and rapid execution:

“We arrived late Friday afternoon, and our licences were switched from our previous firm to the new firm by the end of the day,” recalls Harvey.

“Once that happens, you’re allowed to solicit your clients. We had prepared an email to go to all clients about our move, which went out that Friday night. On Saturday, Sunday and Monday, my business partner Bruce Moffatt and I contacted all clients by phone.”

Andersen says most clients asked three questions during those calls:

  1. Why did he move?
  2. What’s in it for them?
  3. What’s the upside for you?

To answer, he prepared a script outlining his key reasons and memorized it before making the calls.

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