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

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