Essential Checklist For Financial Advisors Changing Firms

Changing firms is a major career step for any financial advisor, and it requires careful planning to ensure a smooth transition. This checklist is your guide to navigating the essential legal, ethical, and logistical steps to keep you in compliance and set the stage for continued success.

Key Steps When Changing Firms as a Financial Advisor

Before you make any decisions, you must understand your current employment contract. Pay close attention to any restrictive covenants, nonsolicitation clauses, or noncompete clauses. These can significantly impact your ability to practice and contact clients after you leave. We highly recommend consulting an expert specializing in financial industry employment changes to interpret these complex legal documents.

If both your current and new firms are signatories to The Broker Protocol, you can take certain client information with you without facing legal action. It's critical that you know exactly what information you are and are not permitted to take and that you adhere strictly to these guidelines.

It is a breach of your fiduciary duty to discuss your plans to leave with clients while you are still employed at your current firm. Once you've officially made the move, if your contract permits it, contact clients as soon as possible. Be sure to explain that you were not legally allowed to discuss the move beforehand and highlight how your new position will benefit them.

A firm change requires you to update your registration with all relevant regulatory bodies. You must also handle any potential compliance issues that could arise during the transition to prevent any gaps in your ability to serve clients.

Make sure all your professional licenses and certifications are current and transferable to your new firm. Coordinating this process between both firms is key to avoiding any practice disruption.

Once your move is public and compliant with all agreements, you should immediately update your LinkedIn profile and any other professional listings. Making your new contact information easily accessible to clients and professional contacts is crucial for a seamless transition.

While financial advisors often have high client retention rates, be prepared for some clients to decide not to follow you. If this happens, respect their decision and provide them with all the information they need to continue receiving service from your old firm.

Any transfer of client data and files must be handled with the utmost security and in compliance with privacy laws and firm policies. You should only take client information that is permitted by The Broker Protocol and your employment agreements.