A Guide to Transitioning Financial Advisor Clients

Client transitions happen for several reasons: retirement, joining a new firm, or preparing for succession. Whatever the reason, moving clients from one advisor or business structure to another takes planning, transparency, and careful attention to regulations. 

In 2024, 9,615 experienced financial advisors changed firms, a figure that was down by less than 1% compared to 2023, when 9,674 advisors changed firms.¹ This demonstrates how common and important this process is now.

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Understanding the Transition Process

Transitioning clients is a mix of timing, planning, and relationship management. Are you changing firms or planning for retirement? Knowing what to expect makes the process easier. 

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Reasons for Client Transitions

Client transitions happen for a number of reasons, such as retirement or moving to a new firm. Sometimes it’s about offboarding clients or reshaping your practice for the long term. These transitions allow advisors to set up better structures and plan for growth in the future. Taking the lead early also reduces the chance of losing clients in the future.

What a Transition Looks Like

Every transition is different. A full succession plan may play out over three years, giving clients time to get comfortable with a new advisor. If you’re switching firms, that process might last 60 to 90 days. Account transfers through ACATS (Automated Customer Account Transfer Service) take as little as five to six business days. 

It’s a good idea to give clients time to adjust. For example, if you’re planning a succession, introduce your successor early and let them join client meetings gradually. A survey showed that respondents preferred to move during the first and third quarters of the year, at rates of 33% and 26% respectively.²

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Legal and Compliance Considerations

Every client move has rules you need to obey. Before you start, you need to know what’s allowed and what needs approval. These steps protect your clients and keep you in good standing during the transition.

Regulatory Requirements to Remember

As always, there are regulations to keep in mind. FINRA Rule 11870 outlines how brokerage accounts are transferred, including how clients begin the process and what documentation is required. 

If you’re part of the Broker Protocol, it gives guidance on what client information you’re able to take with you. This usually includes names, contact info, and account titles. You’ll also want to make sure all your registrations and licenses are current at the new firm before doing any business. Keeping clean records and following the process helps you avoid problems in the future.

Working with Broker-Dealers and Custodians

Your relationships with broker-dealers and custodians affect the timing of your move. Some firms require advance notice, while others have specific steps you need to follow. These partners also help manage the technical side of client transfers. For example, custodians often assist with ACATS submissions and can guide you on how and when to communicate with clients. Looping them in makes the transition a lot simpler. 

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Communicating with Clients

Clear and timely communication has a significant impact during a client transition. Reaching out early eases concerns and keeps relationships strong. A good message sets the tone for what comes next. According to a McKinsey survey, 32% of investors switch firms when their existing advisor leaves for retirement or other reasons. ³

How and When to Notify Clients

It’s best to reach out as soon as plans are in motion. That doesn’t mean rushing, but waiting too long can lead to uncertainty or mixed messages. Start with a simple announcement, ideally through a personal call, followed by a letter or email. Keep it focused. Explain the reason for the move, how it benefits them, and what to expect next. A sincere thank you also goes a long way. 

Common Client Concerns (And How to Address Them)

Clients often want to know things like, “Will anything change with my portfolio?”, “Is there anything I need to do?”, or “Will I still be working with you?” It’s helpful to reassure them that their goals remain the priority and that support will continue without disruption.

Here’s an example of what you might say: “I’m making this move to give you better access to tools and services, but nothing will change in how we work together. I’ll walk you through every step and be here for any questions you have.”

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Preparing for Account Transfers

Once clients are on board, the next step is moving their accounts. This part involves paperwork, timelines, and some challenges, but being prepared will make the whole process a lot easier. 

Essential Paperwork and Documentation

You’ll need a Transfer Initiation Form (TIF) to begin the transfer. This kicks off the process through systems like ACATS. Some firms might also require their own forms or checklists, so it’s confirmed what you need ahead of time. Using e-signature tools and secure portals helps move things along faster.

Avoid Common Transfer Complications

Most ACATS transfers follow a simple process: initiation, validation, and transfer. These steps typically take five to six business days, but it takes longer if forms are missing or account types don’t match. One way to speed up the process is to double-check that client names, account numbers, and details line up across documents. Let clients know what to expect and keep them documented throughout. For advisors, 42% cited system integration and data accuracy concerns among the main challenges for transitioning⁴. 

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Strengthening Client Retention

Keeping your clients through a transition depends on trust, consistency, and communication. Most clients stick with the advisor, not the firm. Staying present and proactive makes all the difference. For advisors, 79% cited technology as a key factor in their decision to switch firms, surpassing compensation⁵.

Reinforcing Your Value Proposition

This is a great time to remind clients why they chose to work with you. Let them know what new tools or services are available and how those changes support their goals. Share your plans for the future and how you’ll continue helping them stay on track. The more clearly they see your ongoing role, the more likely they are to stay with you.

Staying Proactive During the Transition

Clients feel more comfortable when they know what’s happening. Regular updates by email, phone, or even a short video go a long way. Consider sending a welcome packet that explains what’s new and what’s staying the same. Hosting a brief Q&A call is another great way to answer common questions and show that you’re always available when needed.

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Onboarding Clients at Your New Firm

Once accounts have been transferred, it’s time to help clients settle in. An easy onboarding process shows them they’re in good hands and that you’re still focused on what they need.

Introducing New Systems and Processes

Start by taking clients through the basics, including how to log into their accounts, where to find key documents, and how to reach you or your team. Share helpful links or short guides if the platform is new to them. Let them know when to expect responses and how communication will work moving forward.

Setting Relationship Expectations

Clients want to know what their experience will look like going forward. Let them know how often you’ll meet, what types of updates or reports they’ll receive, and how you’ll continue supporting their goals. Reassure them that while the firm may be new, your commitment to their financial journey hasn’t changed. 

Wrapping Up Your Transition

A strong transition doesn’t stop at account transfers. You also need to focus on stable relationships and keeping your workflows moving. When done well, this process gives clients more reasons to stay and gives you a fresh start with lasting support. According to a survey by Advisor360°, 83% of financial advisors who switched firms in the past three years are happy with their decision, and 35% wish they had moved sooner⁶.

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Key Takeaways

• Client communication should start early and stay consistent
• Legal and compliance steps should be handled before making a move
• Simple account transfers require the right forms and follow-up
• Retention depends on trust, clarity, and continued service
• Onboarding is your chance to make a strong first impression at your new firm

Action Items

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FAQs

How do I choose the right successor for my practice?

Start by thinking about who understands your clients and shares your values. A good successor should be someone clients can relate to and trust. Don’t just look at credentials, find someone who fits your practice’s personality and long-term vision.

What are the benefits of having a succession plan in place?

Outlining a plan gives everyone direction. It keeps everyone on the same page during major changes and assures clients that their needs will continue to be met, regardless of what your timeline looks like.

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