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Beverly Flaxington is a practice management consultant. She answers questions from advisors facing human resource issues. To submit yours, email us here.
Dear Readers,
Each month, this column will focus on issues related to advisor transition. One of the most difficult ones is working with your team as you determine how, when, and where to transition your firm. In many cases, a team becomes like family. Everyone has a role and knows they belong. The potential upset of transition can be daunting and scary.
It is not the best approach to say “nothing will change” or “this will be good for everyone” or “we are going to be in a better place.” The team knows you are monetizing the firm, and perhaps they have an ownership stake. However, they often do not. They will worry about their jobs and their livelihoods. If you search many sites that are trying to woo advisors to join them, you will see a great deal about how to transition clients effectively. But you will almost never see material talking about the emotional impact on the team. How can you protect them and bring about a comfortable transition?
Let’s explore some ideas:
- Be as transparent as you can possibly be from the very beginning. You don’t have to share all of the details of everything you are trying to do, but let your team into the “why” of what you are thinking about doing. For example, what are the drivers of your decision to make a transition?
a. Need for scale
b. Need for additional or different form of support
c. Desire to continue the firm/team legacy
d. Interest in partnering with other successful advisors
e. Seeking ways to serve clients more effectively
Your team may believe everything is fine and that there is no need for additional support, so explaining your vision and sharing things they may not realize or be privy to is important. It is best to let your team know your thought process and ideas before you start exploring. You could, at this step, ask for their input about the types of firm you might want to be considering. Note: This all depends on your relationship with your team, their commitment to you, and their level of knowledge and savvy. You must decide what and how to share based on these factors. This is not a one-size-fits-all approach.
2. When talking with possible partners or buyers, learn about their past history taking on teams/firms and how they worked with the team members throughout integration. The more insight you can gain about historical patterns, the more confidence you will have in setting expectations for your team.
3. Once you are ready to make a decision about a partner or buyer, start talking with your team about what you know about the firm and its approach. Depending on the stage of process and the confidentiality terms, you may not be able to share names and details, but you can talk generally about why you are leaning toward this firm/partner and what you like about it. If you are able to share details, ask the team to review the firm’s website and come back to you with questions you may not have thought to ask.
Please note that this idea is not appropriate if you don’t believe all of your team members are going to be retained. In most cases, the entire team goes with the advisor, and if that’s your case, then engaging them and being collaborative before the transition happens can help build a positive attitude toward the new situation.
4. Highlight areas of benefit with the new firm/partner. What will the gains be for clients? For team members? What new and exciting aspects will your team be able to leverage? Balance this with the difficult pieces. Talk about how the transition is going to take time. Identify potential obstacles such as changes in technology, investment strategy, or culture. Provide an honest view of the pros and cons. Because this is the direction you have chosen, there are likely more pros than cons — be sure to highlight this for your team.
5. If appropriate, ask your new partner or the leader of the acquiring firm, to meet with your team. Human beings are often wary of people they don’t know yet, so remove the aura of dread and uneasiness by allowing them to have direct contact — without you present, if possible. Allow them to engage, and ask questions, and learn something about your new partner/leader on their own terms. And coach your new partner/leader about the team — share things they care about, or specific aspects of each individual.
Think of this as a recruiting exercise — recruiters want the candidate to know as much as possible about the hiring manager, and they want the hiring manager to know the triggers and benefits of the candidate. Note: Again, use your discretion. If your new partner/leader is not engaging and might say something that could be perceived negatively, obviously don’t put this step in place.
6. Talk to your team about problem-solving and specific next steps once the two firms/teams come together. What expectations do you have for each of them? How can you coach and encourage them if things go awry? What skills can you encourage them to leverage to be as successful as possible in the new environment?
It’s important to go into “coach mode” for the transition. Your team may be extremely talented and highly professional people. However, even the best team members can struggle when a change is happening and they don’t know how it will ultimately affect them. Be open in advance about what struggles they may face.
7. Lastly, and very importantly, be encouraging, but also realistic. It’s not appropriate to ignore or undervalue any concerns your team might have. Let them voice what worries them, and listen with empathy. This transition will represent change from something they have hopefully come to appreciate (working with your team/firm), and not all change is good change for team members. They may ultimately have to make decisions to stay or go. Encourage them, of course, but be fair about how much stress or worry this could possibly cause. You can’t fix that, but you can let them know you understand and will be with them every step of the way. It might be the best thing that could have ever happened to them, but only time will tell!
Beverly Flaxington co-founded The Collaborative, a consulting firm devoted to business building for the financial services industry, in 1995. The firm also founded and manages the Advisors Sales Academy. The firm has won the Wealthbriefing WealthTech award for Best Training Solution for 2022, 2023, 2024 and 2025. Beverly is currently an adjunct professor at Suffolk University teaching undergraduate and graduate students Entrepreneurship and Leading Teams. She is a Certified Professional Behavioral Analyst (CPBA) and Certified Professional Values Analyst (CPVA).
She has spent over 25 years in the investment industry and has been featured in Selling Power Magazine and quoted in hundreds of media outlets, including The Wall Street Journal, MSNBC.com, Investment News and Solutions Magazine for the FPA. She speaks frequently at investment industry conferences and is a speaker for the CFA Institute.
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Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.
