Executive Summary
Many readers of this blog contact me directly with questions and comments. While often the responses are very specific to a particular circumstance, occasionally the subject matter is general enough that it might be of interest to others as well. Accordingly, I will occasionally post a new "MailBag" article, presenting the question or comment (on a strictly anonymous basis!) and my response, in the hopes that the discussion may be useful food for thought.
In this week's MailBag, we look at the issues to consider if you want to change where you live, but are concerned about whether the relocation means you'd have to sever all your existing client relationships and "start over" or not. Fortunately, the answer is that while not all clients be willing to stick through you in a transition, today's technology tools make this more feasible than ever before, and the key is to start interacting with your clients more virtually now, so that by the time you actually move it won't be such a big deal anymore!
Question/Comment: Hi Michael. I'm a CFP in Southern California. I've been in practice for 8 years and solo practice for the past 2.5. My wife and I are seriously considering a move out of state for family and lifestyle reasons. I'm 30 and most of my clients are over age 55. I'm wondering whether you've heard of other advisors successfully transitioning their practices out of state "mid-stream" so to speak without having to start over. If so, could you share some insight as to how they did it and what some best practices might be. It may also be that the answer is "DON'T DO IT! Suck it up and stay where you are." but I'm not sure. I feel like I'm being a hypocrite by telling my clients to pursue their own lifestyle goals and go after the life they've dreamed of when I'm not doing that for my own family. Thanks.
You are definitely not alone in considering this type of move. In fact, I find it increasingly common, whether it's for an overall change of lifestyle/pace, a desire to move to a more tax-friendly or "business-friendly" state, or for many in their 20s and 30s simply because the advisor plans on having children and wants to move back close to their own family network for support.
Relocating As A Financial Advisor
And the good news to your question is "yes", there are many advisors who have transitioned successfully without giving up everything. It's worth noting, though, that in some cases the advisor actually chooses the move as an opportunity to make a transition not just personally, but to a new clientele as well. In other words, the advisor started over from scratch, in part because he/she thought it was a good idea to do so, and was an easy way to let go of a number of clients the advisor took on early, but didn't really want to work with anymore. In some cases, the advisors I know just walked away from those clients.
In at least a few situations I’ve seen, they actually sold a portion of the clients/practice to another advisor that was in the area (using services like FP Transitions, or whatever their custodian or broker-dealer offers to facilitate purchases/sales), and then relocated elsewhere. At least if you’re not bringing your existing clients/practice with you, the sales proceeds can help give you a cushion when you do re-start.
If Clients Will Be Eventually Virtual, Get Started With Video While Still Local
For those you do want to keep, realistically you may not be able to hold on to all of them if you relocate, but you likely can hold on to many or even most. The key is to get those clients comfortable with the fact that your relationship will be at least somewhat more “virtual” – in-person meetings may become video meetings, and interaction may be more by telephone and email than it was in the past. Obviously, the more you happen to already interact with and work with your clients this way, the less of a big deal it may be to relocate away from them in the future.
But that’s actually the point, as well. If you anticipate move may be coming, now is the time to invite your clients to start trying out some meetings with you using tools like Skype or GoToMeeting, and getting them (more?) used to interacting with you by email and telephone. For your few clients who aren’t interesting/willing to do this - you try to get them to meet with you virtually, and they just won't adopt the tools - well, now you know who probably isn’t going to retain when you move, either.
For many clients, though, you may find it’s really not such a big deal, even if they're "older" and past the age of 55. If they can talk to their grandchildren using Skype, they can talk to you too! And if they don't have the necessary equipment... heck, a basic webcam is so cheap, you can just buy one for every client you're hoping to keep for the long run anyway!
The key distinction is that you're going to be inviting existing clients to meet with you virtually. Which shouldn't be very difficult, as they already know and trust you enough to do business with you (and it’s far easier to retain a client virtually, then it is to get a new client virtually, although the latter can be done as well). Once you start getting your existing clients used to doing 2/3rds of their meetings with you virtually, it’s suddenly not a big deal if you relocate and those 2/3rds virtual meetings happen to be done from your location 1,000 miles away. And you can still travel back to the area periodically – once or twice a year? – to do a series of in-person meetings with all the clients there, who you still want to touch in person from time to time (you can come to town for 1-2 weeks at a time, get some temporary office space, and just meet with the clients back-to-back one after the next).
In truth, I think you’ve really already answered your own question of whether this is a good idea or not, by recognizing the disparity between what you tell your clients about pursuing their lifestyle goals, and the extent to which you’re living out your own (or not, but will be soon!). So the question is just how to do the transition most effectively. And the answer is that you can start now getting your clients accustomed to interacting more with you through technology – even if you just suggest it to those clients as an excuse to avoid the local traffic for the next meeting – and once many/most who already trust you are used to meeting with you that way, having you be further away won’t be such a big deal after all.
So what do you think? Have you relocated and kept your clients (or sold them?)? What were your tips and tricks to keeping your clients through the transition? If you have any other lessons learned - good or bad - please share in the comments below!
