Taking Over An Adviser's Book Can Be A Challenge

Posted on March 25th, 2015 at 10:59 AM

From the Desk of Jim Eccleston at Eccleston Law LLC:

According to InvestmentNews, taking over a retiring financial advisers’ business may sound easy compared to the business development effort it takes to recruit an entire practice of clients, but it could be a challenging task.

Advisers may face hurdles establishing trust with clients or just navigating a mixed bag of client personalities and their multiple situations. Likewise, depending on the extent of the takeover, advisers may find themselves dealing with new employees and potentially incompatible technology.

A few points to consider: First, if the business has focused on different products, the difference would require a lot of education about the options available to clients.

Second, personality is a big part of why someone chooses to work with an adviser. As a result, it can be challenging if the new adviser's character doesn't match up well with clients.

Third, with acquisitions of larger practices, sometimes employees come along with the deal. That, too, can be a positive or negative factor. Staff can help with clients for some continuity, but it's also difficult sometimes for employees to accept the new ownership group.

Fourth, it's not always the case that the retiring adviser will introduce his or her successor to clients.  One concern is that it's hard to show clients what the new advisers can do differently to add value to the relationship while the original adviser is sitting there.

The attorneys of Eccleston Law LLC represent investors and advisers nationwide in securities and employment matters. Our attorneys draw on a combined experience of nearly 65 years in delivering the highest quality legal services.

Related Attorneys: James J. Eccleston

Tags: InvestmentNews, Advisers, James Eccleston, Eccleston Law LLC

Return to Archive

TESTIMONIALS

Previous
Next

I just wanted to say thanks again for preparing and executing my case in such a professional manner. It was a pleasure to watch two professionals take such pride in their work, as well as becoming personally in tune with your client (Me). I would personally recommend you and your firm to anyone.

John O.

LATEST NEWS AND ARTICLES

October 20, 2021
5 First-of-Their-Kind SEC Enforcement Actions Announced

Securities and Exchange Commission (SEC) Enforcement Director Gurbir Grewal recently discussed notable first-of-their-kind enforcement actions that his division has pursued.

October 19, 2021
FINRA Targets SPACs in Most Recent Exam Sweep

The Financial Industry Regulatory Authority (FINRA) has begun an examination sweep of advisors’ involvement with special purpose acquisition companies (SPACs).

October 18, 2021
SEC’s Statement on Complex Exchange-Traded Products

The Securities and Exchange Commission (SEC) recently voted to approve a pair of rule changes proposed by Cboe BZX Exchange, Inc. to list and trade shares of new exchange traded-products: the 2x Long VIX Futures ETC and the -1x Short VIX Futures ETF.