New Town, New Strategy

A few years ago, Michael Hardy, an advisor in Buffalo, NY, fell in love. Only trouble was, the woman in question lived in New York City—and together they decided he should move down there, too. But what would he do about his practice?

The answer, as it turned out, was surprisingly straightforward. Hardy would move down to the Big Apple, but continue serving his clients up in Buffalo, doing his best to build relationships in his new home base. Hardy had joined his firm, Mollot & Hardy, 10 years earlier and his partner, who had started the practice about 20 years before that, would continue to run operations from Buffalo.

So, Hardy met with his clients, explaining why he was moving, assuring them that the level of service, as well as their usual mode of communication, a mix of in-person meetings, e-mails and phone calls, wouldn’t change. And, about two years ago, he set up shop in his new home, flying up to Buffalo for one week out of every month for client meetings and communicating the rest of the time via e-mail and phone calls. Result: no client defections. “This system is working just fine now,” says Hardy, who has about $20 million in assets. “If all goes well, I can see doing this for another 10 years or more.”

What Hardy discovered is something that a growing number of advisors also are experiencing. In today’s world of e-mail, Skype, omnipresent smart phones, and frequent travel, it’s easier than ever before to move your practice and continue serving your old book—without losing any clients. After all, most advisors, even those who stay put for their entire careers, have at least a few long-distance accounts.

At the same time, however, running a far-flung practice isn’t for everyone. It means doing everything from engaging in the right planning well before the move and setting your client’s expectations to putting in place effective technology systems, all the while trying your best to network and find new accounts in a place where you may have few previous contacts. “It’s perfectly doable, yes,” says Philip Palaeev, president of Elmsford, NY-based Fusion Advisor Network. “But it takes a lot of discipline.”

The first rule of thumb is to plan ahead—way ahead. According to Palaveev, the ideal is to start preparing a year or even more before you make the move. When Mark Hollingsworth, a veteran financial advisor then in Newport Beach, Cal., signed on with Raymond James in 2006, he did so knowing that he probably would be moving in another two years. He and his wife realized their two daughters planned on going to colleges on the East Coast and,” I didn’t want to have them fall in love with some guy and live out there, while my wife and I were tied down in California,” he says. The result: When he started with Raymond James, he negotiated an arrangement through which he could open a satellite office in Pinehurst, NC, eventually.” So, when I actually told them I was going to do this, everybody was on board,” says Hollingsworth, who manages about $100 million in assets.

One important part of your preparation, of course, is making sure your clients are comfortable with your plans. “Most important is reassuring them that the type of relationship you have will not change, even though your physical office may be in a different location,” says John Nersesian, managing director of Nuveen Investments in Chicago. That means establishing how frequently you will be in touch with them and, especially, your schedule for in-person meetings. Best is if you can continue the same meeting schedule your clients are already used to. If, for example, your A clients are accustomed to meeting with you in-person twice a year and your B clients see you annually, then you need to keep to that arrangement.

Of course, if you’re moving from a wirehouse, then you can’t do a lot of client preparation before you hand in your resignation. But, after that, you need to take action as quickly as possible , not only to tell them about your new move, but to reassure them that the service they receive won’t suffer. Take Jeff Smith. When he contacted his clients about his impending move from Merrill Lynch in Indianapolis to Wells Fargo in Tampa in 2009, “the biggest thing I had to do was to be very very clear in my message about being committed to continuing the same service level, that we would still do face-to-face reviews in their living rooms, and make sure they were comfortable with that,” he says. He moved just three weeks later.

In some cases, you may find you end up seeing your clients in person more often than you did in the old days. That may be because your clients, knowing you’ll be in the area for only a limited time, end up trying to meet with you face-to-face as often as they can when you’re there. Hollingsworth, for example , who goes back to California every 90 days or so, says he was surprised to find how eager clients were to make in-person appointments with him. “There are some clients I see virtually every time I go back,” he says.”But when I lived there, I never actually saw them that often.”

Other advisors find they have more client communication than before for another reason: Because they’re in the area only during certain weeks of the year, they need to make sure they schedule client appointments methodically, rather than waiting for clients to contact them. According to Hardy, for example, while he used to have a somewhat regular system for communicating with clients, now it’s considerably more systematized—in person meetings at least twice a year, one to two scheduled phone conference calls a month.” I’ve increased my efficiency dramatically,” he says.

It’s all about setting customer expectations—sometimes, a delicate sleight-of-hand. On the one hand, you need to make sure your clients have complete faith in your ability to provide the level of service they want. On the other, you have to make promises you can keep. “You’ll need to train clients to have reasonable expectations of what you can deliver,” says Palaveev. In some cases, you may find they’re willing to be more flexible than you might have expected at first. When he first moved, Hardy, for example, would travel to Buffalo from New York City every other week, for a few days at a time. Then, he decided to change his schedule, spending one week a month in his old stomping grounds—and he discovered none of his clients minded. “I realized I can set the tone and the pace for when I see clients,” he says. “I learned that I don’t have to worry about losing business if I can’t be quite as available as I was in the past.”

Of course, there will be times when you can’t keep to your schedule. A few months ago, for example, Hardy had to fly up to Buffalo for an emergency meeting for a client who needed to have important documentation for a retirement plan organized and signed by the end of the month, which was just a few days away.” The client had waited until the last-minute and we had to meet the deadline,” he says. Still, your goal should be to keep such events to a minimum.

The other major part of your preparation should involve technology. In fact, the right technology can make or break your ability both to run your practice efficiently and communicate with clients. For that reason, for the six months before he moved, Hardy focused much of his attention on ensuring his software was up to par. That meant making sure the right customer information was plugged into, say, his CRM system—so that, for example, each client name contained the right information about dates for scheduling review meetings or when to send a birthday card.

Or, take Ross Richardson. Two years ago, when he realized that he and his wife would most likely move in the near future from their home in Houston so she could pursue her interest in getting a graduate degree in English, Richardson started turning his practice into a cloud-based operation that he could run from just about anywhere. That included new CRM, financial planning and portfolio management systems; according to Richardson, whose firm, Pembroke Advisors, has about $35 million in assets, he also looked for web-based applications with which he could easily transfer data from one application to the other. For Richardson, who moved to Ann Arbor, Michigan in August, having such capabilities was especially important, because he knew that he and his wife would most likely move again once she finished her degree.

As important is how you use technology to communicate with your clients after the move. Depending on your clients’ comfort level, you can supplement your scheduled face-to-face meetings with anything from conversations held via Skype to simple phone calls. When David Yeske merged his San Francisco practice with his wife’s Vienna, Va.-based firm in 2008, he started commuting regularly every other week to see his California clients. But he also introduced a sophisticated technology system for running client meetings virtually, using a web system called GoToMeeting, which allows users to hold remote meetings while looking at the same images or videos on their computers. He also gave each client a secured private webpage containing financial planning, portfolio performance, and tax reports, along with updates, according to Yeske, whose firm has around $400 million in assets.

Perhaps most significantly, your technology systems can make it seem as though you’re practically right next door. For example, calls made to Hollingsworth in North Carolina ring in the Newport Beach office, where he still has an assistant. “If I don’t pick it up, she picks it up in the California office,” he says.

Or, you can try more creative uses of the web. Take John Riley. In 2006, he moved from Providence, Rhode Island to Dallas, looking for a place where he could buy an affordable, bigger house for his wife and five children. He kept the main office for his firm, Cornerstone, in Providence, where he also employed three reps. But, to maintain a relationship with his clients, many of whom, he says, were tickled by his decision to move, he set up a website for posting pictures of his new home and life in Dallas. “All my clients are able to follow our venture down here, and that made a big difference because they felt they were in on this move with me,” says Riley, whose practice has about $135 million in assets. Clients still ask him to put up new pictures.

Ultimately, of course, the easiest way to move your practice is to follow Riley’s lead and maintain an office in your old location. For many advisors, however, that’s not possible. But, it’s helpful to have a house where, at least, you can store things. Richardson, for example, kept his house in Houston, where he still retains his paper files.

Once you’ve moved, you’ll face another challenge: setting yourself up in your new place. That, in fact, can prove to be the more difficult part of the process. “You almost have to think back to the beginning of your practice when you first started developing your book,” says Palaveev. It can take a good two years or more, for example, to begin building strong local relationships and referral networks. According to Hollingsworth, he’s opened about 40 new accounts in the past year and a half, largely through networking with the local Chamber of Commerce and participating in a local small business referral club that holds regular breakfast meetings. But it took him two years or so to get to that point.

Certainly, you won’t entirely be in the same situation you were in when you first started out, since you’ll already be familiar with the basics of networking and establishing yourself in the community. Still, you do need to be careful of one stumbling block: it’s likely that the way you approach clients in your old location won’t completely translate to your new home. “Different cities have different styles and it’s important to understand that when you move,” says Nersesian. For example, according to Nersesian, while it might sound like a cliché, clients in the Northeast tend to make decisions and move quickly, while family connections are especially important in the Midwest. “You may need to adjust your expectations,” he says.

If you’ve gone about your move the right way, you most likely will continue to get new referrals and clients in your former location. The good part: those clients will already know about your long-distance arrangement, so you won’t have to do a lot to manage their expectations. During his most recent visit to California, Hollingsworth ended up with two new clients, referred to him by existing accounts. “They have no issue at all with me being in North Carolina because they know right up front that my home office is here,” he says.