Migrating Your Advisory Practice

So, you decided to go independent with your advisory practice. Congratulations on taking that important first step! You have a vision of what you want to achieve, what direction you want to take your business, and how to grow it.

But then you realize you have to uproot everything and move your book somewhere. You think of all the planning and logistics involved. You think about how your clients are going to receive the news. You think of timelines and deadlines. You stop in your tracks, and that excitement goes away.

Yes, going independent takes a lot of work. A major undertaking in this journey is the actual migration from one registrant to another (either another institution or your own). So, while the migration process can be daunting, you can lighten the load by starting to think about the bigger picture early on and taking it one step at a time.

Key Takeaways:

Perform analyses of your firm’s overall operations as it affects your clients and staff. You can look at this from three points of view:

· Processes — how do you get things done to run your business?

·Systems — what software and tools are necessary vs. what are nice to have?

·Data — what fields in your current database are necessary, and what would be nice to have?

Review your client and account database — this will be the most extensive report you’ll have to prepare for the migration, which includes:

Performing a data reconciliation and clean-up exercise,

Maintaining a document inventory,

Timing the move around major events in your client’s lives and fiscal obligations, and

Preparing a master client and account list.

Analyze your firm’s overall operations

1. Processes

If you think about processes, you think about the flow of events required to complete a task, like a client requesting a withdrawal from their registered savings account, portfolio rebalancing, or collecting KYC information in a secure and compliant manner.

You’re probably already listing in your mind all the business processes you currently have, and it’s easy to get lost. To simplify matters, you can group these based on what affects client experience and what affects internal operations.

Client Experience (how to make this change as seamless as possible for my clients?)

· Say, you want to onboard a client. How will they know about the onboarding? What is the best way to articulate what’s in it for them?

• What will prompt them to take action? If it’s an e-mail, what should it say?
• How many interactions do you want to have with your clients throughout the journey? Will you assist your clients throughout the entire onboarding process (as is the case for clients of firms offering white-glove service), or would they prefer to be left to complete onboarding themselves (as is the case with tech-savvy young professionals)?

Internal Operations (how do I make this migration as efficient as possible for me and my team?)

• Think about patterns in your client base — what requests drive the most volume from clients? If most of your clients have regular withdrawals set up, trades must be placed often to raise cash for these, which could be a potential bottleneck source.
• What is the composition of your clients’ accounts (e.g. are they mostly RRIF accounts, or are there many joint accounts)? The migration workflow for RRIF accounts, has steps related to income payments, which may look starkly different from that of joint accounts, with steps related to reconciling data of two clients in one set of documents.
• What is the distribution of your client base (e.g. are they mostly elderly clients who require regular income payments, and/or do they have individual and corporate accounts?)
• For example, clients with corporate accounts may have to sign more paperwork and require a different set of communications than others. Clients requiring regular RRIF payments may need to be migrated towards the end of the year because custodians are required to pay out the full-year amount before transferring out.

As you determine answers to these questions, it would be helpful to draw up process workflows for each scenario, see where synergies lie to simplify things, and create a comprehensive execution plan.

2. Systems

Apps and cloud-based tools can make a world of difference for your business to be as efficient as possible, but only if you are clear on what you need. From a migration perspective, knowing which tools you require will also determine which ones will house your data, and what integrations will need to be in place for these to talk to one another for a smoother experience.

• Do you need a simple project management tool to manage daily tasks or a more sophisticated CRM tool that tracks client information and activity on top of your daily tasks? Smaller practices can get away with using free tools or even a shared Excel spreadsheet, but larger firms may require tools with added features such as e-mail reminders and activity history that only paid plans can provide.
• Would your business benefit from financial planning software?
• What about a comprehensive reporting platform for you and your clients?

3. Data

Data goes hand-in-hand with your business applications and tools because data is what feeds these systems.

• Which data fields must be migrated, and which do not?
• For example, a client’s name and date of birth are certainly must-haves because these are required for KYC; however, a list of their hobbies is used only during catch-up conversations and may only be nice-to-haves.
• How do you store client documentation that you collect?
• e.g. void cheques as evidence of banking, and do they need to be migrated?

Answers to these questions will determine how simple or complex the migration process may be. It is best to ponder these early on to create a fulsome picture of your business needs.

Review your client and account database

The biggest report you’ll have to prepare for a migration contains all your client information. All. Of. Them. Larger firms that use well-built reporting tools may already have well-maintained data and can extract this report fairly easily. Regardless of your firm size, it is best practice to clean up your database prior to migration so you can start fresh.

Here is a list of steps that will help you conduct the review:

Perform a data reconciliation and clean-up exercise

Think of this first step as rebuilding your client and account database from scratch. Perhaps your current database contains two profiles of the same person, only using an old name. For example, maybe a client is in your records as both Common-Law and Spouse to the same person or is a spouse to two different people. In the normal course of business, you constantly create records in your database, and over time, this can create bad data.

A helpful tip when doing your recon is to group clients into “households” and clean up from there. This will show you who are related, who beneficiaries and TCPs (trusted contact persons) are, or if they share an address, among others.

Do the same for your client’s accounts. Sometimes, accounts are opened without being funded, so check with your clients whether they want to include these accounts in the migration. If ever, you can open the same accounts after the move.

Keep a document inventory

When you go independent, you’ll be opening accounts with a new custodian, who will likely request additional documents during onboarding. Keeping a well-organized inventory of all the client documents you’ve collected so far will help make the onboarding smoother for you and your clients (because you won’t have to bother them for documents in case they’re requested).

For an easily digestible list, assign a quick and easy nomenclature for your inventory (e.g. Doe_Jane — void cheque.pdf) and categories for documents (e.g. identification, banking, transfer statement, etc.)

Gauge the timing of the move around major events in your clients’ lives.

Life happens, and sometimes certain events require complicated and lengthy legal processes to settle, like estate settlements or separation proceedings. This is something you need to consider when deciding when to move. It is best for everyone involved to settle things with your current custodian before the move, so the whole process only has to happen once to avoid any issues with the new custodian during onboarding.

For example, in the case of divorcing clients, they may want to convert their Spousal RRSP account to a regular RRSP. They may also want to close their joint bank account and add their individual bank accounts to their personal registered accounts.

Prepare a Master Client and Account List

Now that you’ve cleaned up your data and determined which clients and accounts will move and when, it’s time to prepare your master list. This will be your reference for all the different activities that are up ahead once you start working on the migration. Think of it as your outline, as if you were writing a research paper, or as your blueprint, as if you were building a skyscraper.

The tips above are by no means an exhaustive list — in fact, this is only touching the surface. However, as with all big decisions that require a lot of effort to execute, they can be conquered by thinking ahead, one step at a time.Our team at Purpose Advisor Solutions can help you get things in order. Reach out to us at www.purposeadvisorsolutions.com.

Angela Espinas is a Senior Strategic Initiatives Associate at Purpose Advisor Solutions.