Unlock your independence

The New Transition Checklist

Welcome back to another episode of the Independence Playbook. In today’s episode, John is joined by Caitlin Douglas, Director of Transition Services, to discuss the transition to the independence model. Caitlin shares the checklist for advisors considering the move to independence and how the pandemic altered some ways we approach transition services today.

Podcast Transcript

Podcast Episode #2 Transition:

Hello I am John Sullivan and I head up Business Development for Dynasty Financial Partners.  I am hosting a podcast series called The Breakaway Playbook.  The first episode dealt with Due Diligence.

This second episode focuses on transitions and features Caitlin Douglas who leads Dynasty’s Transition Services.  In this episode, we will discuss the checklist for transitioning to becoming an RIA and includes information about the biggest challenges, what has changed post pandemic and the biggest surprises.

Hi Caitlin! – let’s get right to it.

What are the biggest issues and concerns for advisors when transitioning?

  • They don’t know what they don’t know – what if they miss something that is detrimental to establishing their RIA?  It’s important to have a partner with experience with transitions  – project management system, countless transitions under our belt, experienced transition lead as quarterback.

What are the biggest misperceptions?

  • Timeline, both pre launch planning and post launch transition of assets – a well managed and planned transition can be successfully executed with 4-6 months of proper pre-launch planning.  Most of our teams post launch see 90%+ of assets within 60 days, some much shorter.

Biggest surprises?

  • It’s a lot of work, but easier than they thought with an experienced transition partner leading the charge
  • Additional assets and prospects that come out of the woodwork stating “We were waiting for you to do this”

What are the common questions advisors have?

  • Given the nature of our industry  – a lot of questions center around legal and compliance.
    • Can/how do I charge on an asset?
    • Business development opportunities w/solicitors and referrers
    • Consulting arrangements
  • Recommendations around strategy for securing real estate, signing leases, etc. to ensure they maintain duty to their employer and incubation.

What are the 2-3 biggest decisions advisors need to make during a transition?

  • Operating Agreement decisions/equity ownership
  • Branding/Marketing

How long does a transition take?

  • A well led and planned transition should take 4-6 months of prelaunch work.  Post launch there are many variables that lead to the speed of the transition of assets, but most of our teams see 90%+ assets within 60 days.

Do you deal with the emotional side of the transition?  Share anecdotes

  • Everyday, all day!  Having led a transition for the RIA I was at previously, I can honestly say I have been in our advisors shoes.  This goes a long way – I understand that this is their lives work and most likely one of the biggest decisions they have made in their lives.  Being available 24/7 to our advisors during the transition process is crucial and we form strong, long -lasting relationships well past transitions.

What has changed in transitions over the last five years?

  • Digital account opening process
  • Leveraging technology

Did Covid impact transition process?

  • Covid absolutely impacted the transition process, in mostly a positive way.
    • Advisors knew where clients were going to be – didn’t have to chase clients down to tell them the news – sped up the transition process
    • Custodians were forced to improve their digital account opening process
  • Negative impact was custodians and some resource partners not being able to provide onsite support
    • Dynasty never stopped traveling – was onsite and carrying out the role of multiple resource partners to ensure a successful launch of our teams.

Recommendations for advisors prior to beginning a transition?

  • Enter the transition process with an open mind and lean in on experts that have successfully guided countless advisor teams to independence.

Important to assign roles for team members?

  • Extremely important – we first need to identify who is pertinent to the transition and will involved in the planning – the “circle of trust”  – anyone involved should have a specific role and responsibility that is crucial to the success of the transition.

Other advice?

  • Independence is going to open the door to multiple opportunities the advisor probably wasn’t able to pursue at their prior firm due to a more captive environment.  Gather and transition your assets first and build a firm foundation for your clients, then start to pursue these opportunities once you have your feet underneath of you.

Thank you Caitlin for your great insights!  Our next episode will focus on marketing and will feature Dynasty’s Chief Marketing Officer Gordy Abel.

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