A pervasive myth has haunted financial advisors considering a broker-dealer transition: that assets are difficult to move. This belief fuels hesitation and prolongs decision-making, even when an advisor knows they need a change. However, both anecdotal and empirical evidence overwhelmingly debunks this notion.
Take, for instance, a recent post on Reddit by user @playactionpass, who shared their experience transitioning their book of business to a new firm. Their timeline speaks volumes:
- 50% of assets moved within the first 14 days.
- 70% moved by the end of the first month.
- 90% transitioned by the end of the second month.
This firsthand account aligns with broader industry data. According to Fidelity, nearly all advisors (92%) who transitioned in recent years report being happy with their decision. But it’s not just about personal satisfaction—80% say they are in a better financial position post-move.
The numbers are staggering: Advisors who’ve been with their new firms for three to five years experienced an average AUM increase of 59%, jumping from $105M pre-move to $167M post-move. That kind of growth isn’t just career-altering; it’s life-changing.
Perhaps most telling of all, satisfaction skyrocketed after the move. Before transitioning, only 8% of advisors reported being satisfied with their firm. After making the leap, that figure surged to 67%.
Why the Myth Persists
The fear that assets won’t move is rooted in uncertainty. Advisors often underestimate the loyalty of their clients and overestimate the obstacles in the transition process. Concerns about losing clients or encountering logistical hurdles loom large, fueled by anecdotes of failed moves—anomalies that tend to get outsized attention.
Additionally, a lack of understanding about the tools and resources available to smooth the transition process can make the leap feel riskier than it is. Broker-dealers often dedicate significant resources to transition support, including detailed action plans, communication templates, and expert teams to streamline the process.
The Truth About Client Loyalty
The reality, as shown by @playactionpass’s experience and backed by Fidelity’s research, is that clients rarely stay behind when a trusted advisor departs. This loyalty stems from the personal relationships advisors build with their clients. For most clients, the advisor—not the firm—is the cornerstone of their financial strategy.
Moreover, many clients are relieved when their advisor makes a move. It signals that their trusted financial professional is prioritizing their best interests, especially when moving to a platform with better technology, lower fees, or more robust investment options.
How to Smooth the Process
For advisors still hesitant, here are a few key steps to maximize success:
- Plan Ahead: Work closely with your new broker-dealer’s transition team to map out the process before announcing the move.
- Communicate Clearly as Allowed: Follow guidance from the broker-dealer you are transitioning to on what is permissible in communicating with clients, ensuring compliance while effectively sharing the benefits of your move.
Breaking Free from the Myth
The myth that assets are hard to move is more about fear than fact. Stories like that of @playactionpass, combined with compelling data from Fidelity, demonstrate that with proper planning and execution, the vast majority of assets transition successfully—and often faster than expected.
If you’re a financial advisor weighing your next career move, let these examples and data remind you: your clients trust you. And with their trust comes their willingness to follow you to new opportunities.
This article combines firsthand accounts and insights from Fidelity to provide a comprehensive view of asset transitions. For more insights into broker-dealer transitions and how to plan yours, visit AdvisorHub.com
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