7 Transition Tips for Leaving With a Clean U5

​We’ve all been there: A new and better opportunity presents itself, we’re looking to move up in our careers, or we’re just sick of working for Susan, a hapless manager who is a terrible person on all counts. Regardless of why we pursue newer and better options, it’s essential to act strategically, know your rights, and have a career transition plan in place.

A transition plan is a vision for your future, and, in some cases, it can be a way of manifesting the things you want, like more career growth at a new firm or the ability to start your own venture. A transition plan is also a shield against negative U5 disclosures or employer sabotage. Before you say “sayonara” to Susan, consider developing and following a plan for your transition. Here are seven things you can do right now to make sure your next transition goes through without a hitch.

Find Your Better Fit

Think about it long and hard: What is it about your current firm that isn’t working for you anymore? Do you find yourself clashing with your co-workers or manager? Have your career goals changed? Is there a better way to service your clients? Or do you simply need a new challenge?

The best career move you can make is to a firm that matches your career goals, personality, values, and product interests. So before you take a step in any direction, be sure that the move you’re making is the right one for you.

Figure Out What’s Important

​Going to a new, already-established firm isn’t the answer for everyone. Sometimes starting your own firm with your own rules is, and now you’re at a point in your career where you have enough clients and experience for it to be feasible.

As exciting as starting a business can be, there are some real things to consider before taking the dive. First, think about how you want to structure your new business. Do you plan to run the business on your own, or do you plan to create a partnership with another advisor or team of advisors? Consider that carefully and build it into both your transition plan as well as your business plan.

You’ll also want to clearly define where you’re going to source your initial business capital and map out the costs for staffing, leasing space, marketing, and anything else you may need to help your business thrive.

Know Your Privacy Policy

The moment you start considering other opportunities should be the moment you begin reading up on your privacy policy.

Privacy policies can vary from firm to firm. Understanding the nuances of your firm’s privacy policy will give you clarity as to what client information you can and cannot take with you during a job transition. It’s also an excellent and helpful segue into organizing your book of business.

Know the Makeup of Your Book

Some of your clients are like family, while others…well…you would prefer to leave behind. These may be relationships that you’ve outgrown, that never had a chance to grow, or that you realized wouldn’t be a good fit overall. 

Instead of moving firms with a bunch of extra data and clients who are more of a headache than they are worth, give yourself a fresh start with a book that’s tidy and fits your vision for how you want to grow over the next 3, 5, or 10 years. Begin the process by taking a few minutes every day to comb through your book, and determine which clients you’ll want to leave with your current firm and which relationships or clients you’ll want to take with you. 

For best results, split your clients into A, B, and C groupings, starting with the list of clients you want to keep (Group A).  Next, create a list with your more middle-of-the-road clients (Group B) as well as a list of clients who you would prefer to leave behind (Group C). Finally, add up the numbers in each list to determine how much financial help you’ll need after attrition. 

BONUS: If there is time to do so, add some demographic information, like age, gender, family size, etc. to each client’s profile so you and your successors have a clear understanding of each client’s profile.

Seek Transition Help from an Attorney

Whether or not your firm participates in The Broker Protocol, you will need assistance determining the best ways to mitigate risk. Consider talking to an attorney outside of your firm before you phase out of it. An experienced firm can help you identify and navigate any obstacles that may come up when you change firms. 

If you don’t have an attorney yet, start by culling a list of firms with a track record of successfully helping advisors to plan and manage their career transitions. At AdvisorLaw, we have specialists and attorneys with the experience to help advisors seamlessly transition from one firm to the next and avoid arbitration.

When determining the best firm for the job, make sure they cannot only help you value your business, find the best fit for your next move, and keep everything confidential, but also that they can offer vigorous defense if your current firm decides to come after you.

Keep the Information You Can Legally Move in Hardcopy or on Your Phone

During a transition, email is a terrible communication channel for contact storage and client discussions. Obviously, your firm can monitor your correspondence, and they can use that information as leverage against you or to cut you off completely. No one wants to get found out by their current firm prior to their resignation so the best way to maintain a low profile is to avoid email altogether. 

Instead, consider keeping all the client information that you can legally bring with you in hard-copy deliverables. It’s also best to keep all conversations about your transition confined to phone calls on your personal cell phone. 

Know and Honor Your Financial Obligations to Your Firm

Brokerage firms often use promissory notes and advance to attract new talent to their organization. Sometimes, the advances can come in the form of forgivable notes that are framed as seed money for helping an advisor grow their business. Taking these resources from your firm is a great way to fast-track your opportunities, but it’s also a way to become vulnerable after your employment.

If you find yourself in a position where you can’t pay the firm or fail to pay the firm, the entire matter could snowball into arbitration, ending with potential marks on your record that can turn you into an industry pariah. Make sure that your attorney is well-versed in note negotiation and payback alternatives.

Ready to create your own transition plan? Check out our Transitions Page or send us a note to learn more about our transition planning services.

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