#FA Success Ep 354: Making Advisor Transitions Less Scary With Effective Transition Preparation And Support Services, With Grier Rubeling

Resources Featured In This Episode:

• Grier Rubeling
• Advisor Transition Services
• Morgan Stanley Smith Barney (now Morgan Stanley Wealth Management)
• UBS
• Legg Mason (now Franklin Templeton)
• New Planner Recruiting
• DocuSign
• Onbord
• Redtail
• Schwab
• Grier’s Protocol and Information Gathering Templates
• Scott Matasar (Matasar Jacobs)
• Kimberly Cronin
• Richard Chen
• DPL Financial Partners
• RetireOne
• Kristen Schmidt
• Verity Larsen
• Lacey Shrum
• Natalie Bergsma Coaching Services

Looking for sample client service calendars, marketing plans, and more? Check out our FAS resource page!

Are you a successful financial advisor, or do you know of one that would be a great fit for the Financial Advisor Success podcast? Fill out this form to be considered!

Full Transcript:

Michael: Welcome, Grier Rubeling, to the "Financial Advisor Success" Podcast.

Grier: Thank you for having me.

Michael: I'm really looking forward to the discussion today and getting to talk and nerd out a bit on the whole dynamic of advisors transitioning from one platform to another. I find there's this phenomenon in the industry that transitions can be a little tough: there's a lot of paperwork of updating advisory agreements and getting new clients' signatures and opening new accounts and transferring dollars and all the setup on the new platform of all the different ways that we do distributions and money flows. And for a lot of advisors, I find it's kind of feels overwhelming, so much so that I see this phenomenon where there's a subset of advisors who are with platforms they're not terribly happy with, but they stay in a relatively unhappy state because the pain and fear of transition is so dramatic. Like, "I'd rather just deal with the pain of where I am than have to go through the stress of a transition."

And so, I'm excited to have you join us because I know your job literally is working with firms to support through transitions. So, you don't have to have the system for doing it yourself because there's literally people you can hire that help you with this. But also just to get to talk about what really is involved when someone goes through a transition in the modern environment, like what does it really take to do and have it go well. So, hopefully, for all those that at least maybe are thinking about whether they should make a change, we demystify what transitions look like a little bit. So, at least if you're going to make the decision to stay, you do it consciously because you've decided that you're content where you are and not because the thought of transitioning is just so scary that you don't want to do it. So, I'm looking forward to just kind of nerd out on how exactly does it work in the modern era when you transition from one of these big brokerage or custodian platforms to another brokerage or custodian platform.

Grier: I'm so glad that you use the phrase "nerd out", because I feel like half the time when I really get into talking about transitions and I start telling people about some of the Excel formulas and stuff that we use for tracking spreadsheets and everything, I feel like I have to stop myself during these conversations sometimes and say, "Oh, I'm so sorry, I'm getting into the weeds, we're getting really granular here and I'm nerding out about Excel." So, it's exciting to be having a conversation with you where not only am I allowed to do that, but I am encouraged to do so.

I actually am sitting at my desk right now. I have a mousepad that is... it's a large mouse pad, but it has all of the different Excel formulas and stuff that you can use, like the functions, the Ctrl-D, Ctrl-R. So, I can just look down under my keyboard and see what function I need to use for Excel. So, if that tells you anything.

Michael: That is fantastic. You can get that on a mouse pad? That's glorious. Bear with us, folks. We're mostly here about transitions and a little bit of Excel fun.

Grier: Yes.

Building Expertise In Transitions As An Entry Into The Advice Industry [6:50]

Michael: So, in that vein, Grier, I think just to start, just help us understand the consulting business that you run and what you do. And then we can get even further into really what you do do and how transitions work. So, tell us about your business.

Grier: Okay. I'm going to kind of... I'll just start from the beginning a little bit because my business is so unique that I feel like I have to describe my background a little bit just because... So, I have been in the financial services industry my entire career. I started out as a client service associate straight out of college working for a single producer at Smith Barney, right before it became Morgan Stanley Smith Barney.

And I just happened to be working for that advisor for about a year before he decided he was going to do a transition and he went to UBS and he asked me to go with him and I said yes. And at the time, I had no idea what that was. So, I was 23 years old, I'd been working in the financial services industry for a year, I didn't know anything about the financial services industry. I had a marketing degree, and I couldn't find a job in marketing because all the entry-level marketing jobs are just like... it was cutthroat to get an entry-level marketing jobs.

Michael: So, I'm presuming timewise this is like 2006–2007 timeframe. We're only a year out before Smith Barney becomes Morgan Stanley Smith Barney in the financial crisis.

Grier: Yes, it was 2007 right after...well, if you want to get deep with it, it was right after the Virginia Tech massacre, which I went to Virginia Tech, and I graduated that year. So, it was a very intense time. I didn't know what I wanted to do with my life. I had just been on campus when 33 people were murdered and it was just this crazy thing where I was like, "I don't know what I'm going to do." I was working at my uncle's restaurant and my aunt who used to work at Legg Mason came to me and said, "Oh, I know a guy, he's looking for a client service associate, you should go interview for the job." And I was like, "I don't know anything about finance, but sure, why not?" And so, I went and interviewed and got that job. And, yeah, so I was just working as a client service associate and we did a transition to UBS. We are in Baltimore, downtown Baltimore at the time, I lived in Baltimore, so I was walking to work in the Inner Harbor.

Michael: Yeah, the Inner Harbor is a nice area to live in your 20s in particular.

Grier: Yeah, it was nice. When we went to the UBS office, we could oversee the entire harbor and were right at the Hard Rock Cafe, so it was pretty cool. It's a nice view. But the first thing I realized when we went to UBS was that he did not prepare me for what the transition was going to entail. And I did all the paperwork, he was not a paperwork type of advisor, and so I immediately realized, "Well, if I had known what to expect in this situation, I would have done this very differently." It was protocol at the time, so I would have organized a protocol spreadsheet differently. I would have just been very organized and prepared but I only knew what I knew and I only knew what I was told by him and he wasn't exactly a pay attention to all the details type of person.

Michael: Yeah, he wasn't exactly the one giving you tips on processes and procedures around paperwork details. That's ironically, why he hired you probably except for the part where he didn't prepare you for it.

Grier: Exactly. Yeah. So, that was my first transition experience. It went fine because I'm a capable person, but it could have gotten much better if I had prepared for it.

Michael: So, for those who aren't familiar, because I'm sure we're going to spend more time on this later, you'd mentioned this was a protocol transition. So, can you explain protocol?

Grier: So, the protocol was created by 3 of the major broker-dealers in the industry, my understanding is basically as a way to make the process of transitioning, not necessarily easier, but a little bit more consistent in what information you can bring of your clients with you. And so, there's 5 pieces of information, which really those 5 pieces of information, if you do it right, can be turned into 19 pieces of information. And you can bring that with you, and the firm that you're leaving can't really go after you for that information, but you can't really bring anything in addition to that information. And all the information that's included in the 5 pieces is mostly contact information, so it's the clients' names, their phone numbers, their email addresses, their addresses, and then you can bring account titles and registrations, which actually gives you a lot of information that you might need during the transition if you look at it correctly. So, that's protocol.

Michael: All right, now, relative to the context of the time, I think protocol came early 2000s. Up until that point, basically... I forget who is doing with which, but Morgan Stanley would recruit an advisor for Merrill and the Merrill advisor would take client information to be able to contact the clients after they left. And so, then Merrill would sue Morgan for poaching. And then the next day, Merrill would recruit a Morgan advisor and the exact same thing would happen and they would literally be suing each other at the same time because one advisor went from A to B and then a second advisor went from B to A. And so, I think part of the protocol was basically just...

Grier: "Hey, let's stop losing a bunch of money in litigation."

Michael: "Yeah, we're all basically net 0. At the end of the year, you took 100 of ours and we took 100 of yours, and we're both evenly positioned, but the lawyers just got rich. Can we just take all this down a notch?"

Grier: Yeah. I like to refer to that period as the wirehouse wars and I entered the industry in the middle of the wirehouse wars, and I didn't really know anything about it, but it was happening all the time. Every 2 months or so on a Friday, you would come into the office and somebody would be leaving and it would be this big deal. And once I got to UBS in Baltimore, we had our regional manager in that office and she was heavily recruiting at the time. And so, I was the most recent employee to go through a transition to UBS and so they were just like, "Hey, Grier, we're going to make you the transition consultant of the branch," and I was like, "Okay."

And they were like, "Oh, and we might even just send you out to some of the other branches too to help with some of these transitions of advisors that we're bringing on." And so, I was like, "All right, great, I don't know that I'm necessarily qualified for this." But I think just because I was the most recent one to go through a transition, I was now the most knowledgeable one about the transition and that's what I was, a transition consultant.

Michael: Well, I'm going to bet that some of the other transitions had gotten worse because many advisors are probably not terribly prepared on the details as your advisor was, but not all of them have a Grier that goes along with them. So, I'm going to bet some others are worse like, "Oh, that one seemed to go well and Grier figured it out, we should have her do more of that."

Grier: Yes, I think in some situations, they didn't always love it when you brought staff with you because it was a...you know, it's a direct cost to the branch, the branch pays your salary when you're working for a wirehouse like that. But I think they quickly realized, "Oh, Grier is an asset to us, we're going to go ahead and utilize her for these other things." And they actually brought on a 16-person team at one point and they did, they hired a third-party consulting firm to come in and help with the transition, and those 2 people, they were consultants I worked very closely with. And they tried to recruit me at the time and they were like, "You got to come do this, leave the wirehouse world, just come be a consultant, you'll make tons of money, and it'll be great."

And I was not ready for that yet. I was like, "Wait a minute, but my parents just told me to get a job. I have stock options, I have a 401(k). I walk to work." And so, at the time, I was like, "No, I don't want to do that." But I look back now and I'm like, "Oh, even back then, transitions were my thing." It was clear to myself and others that that was something that I liked doing. I like the chaos of it all. I know that makes me sound a little bit crazy, but I like making...I like organizing chaos, I like helping people during these times when they feel like it's the most hectic and they're freaking out a little bit, but I'm not freaking out, it's not my book of business.

I'm helping you make sense of this process and making it less scary for you and you are eternally grateful to me for that time in your career. And so, yeah, I really enjoyed doing it. And I did eventually move from Baltimore to Raleigh with my now-husband, his firm was recruiting people to move to Raleigh at the time, so I moved to Raleigh. Got a job in the Raleigh UBS office with an advisor, worked for him for about a year, and he decided to do a transition. So, I've been doing transitions for so many years, not even of my own choosing. And so, he said, "I'm going to start an RIA," and I was like, "Great, I'm coming with you. I don't know what that means, but let's go."

Grier: And so, I was able to...we were still part of the protocol at that point, UBS was part of the protocol at that point. So, I prepped that entire transition and he started an RIA, and I became the director of operations, which basically just meant that I was doing everything that he and his partner who was introduced through the recruiter didn't want to do, which is everything. And I wasn't prepared for that either. I had been a wirehouse employee, I was on a payroll. Now I was working for a very small business and doing all of the things that the wirehouse model did for you. Billing, it was taking me a week to figure out quarterly billing for this RIA and I felt like I had no business being the one to do it. But because I had Excel skills, I said, "Okay, I can figure this out."

Michael: Our billing spreadsheet was legendary in my prior firm. No one, no one, no one was allowed to touch the form in the billing spreadsheet. That is a read-only document for everybody.

Grier: I didn't feel like I was the one qualified to be doing it. But at the same time, I was like, "Don't touch it, I spent so much time on it. You just check it and you make sure that it looks all right. And if something needs to change, you tell me and I'll be the one to change it. Thank you very much." If you ruin any of my formulas, yeah, I'll be really upset. So, I think that most of my career that led up to that point was really just not me necessarily making decisions for myself, but just being put into situations. And so, I had 2 daughters during the time that I was working at this RIA.

And when I was pregnant with the second one, I just was thinking to myself like, "What am I going to tell my daughters when they're old enough to ask me what I do? And am I proud of it? Do I like it? Do I love it?" And I was just kind of sitting at the desk, doing all these things for this very small business, and I was like, "No, I don't really want to do this anymore." So, I did not come back from my second maternity leave, and when I thought to myself, "Okay, well, what do you want to do now?" Well, I tried to find a transition company. I tried to even figure out what that one was that tried to recruit me many years ago, and I couldn't find any.

So, that's when I said, "Well, I have an entrepreneurial spirit." My dad was a business owner, my mom was a real estate agent, I've always wanted to kind of do my own thing, I just didn't know what I would do. And so, I thought, "Well, if I know that there is a need in the market for someone who can help advisors with these very intense periods of time, these intense projects, and I cannot find anybody that's currently doing it, then I think I've identified a need in the market and a possible niche that I can take advantage of."

And so, really what I did was I created a website, I used Wix, and I dragged and dropped a bunch of stock photos. I didn't have any...I didn't even really have like a logo or anything and I just was about to put myself out there and I got...I literally got a call on the day that my website went live and it was it was somebody in the industry who was saying, "Oh, I want to learn about your business." And I was like, "How did you find me?" And they were like, "Oh, I just Googled advisor transition services and your website popped up." And I was like...

Michael: Because that's literally the name of your business.

Grier: Well, and that was my whole thing. I was a marketing...I had a marketing degree and finally, I was getting to use it for something and I was like, "Well, what am I going to call my business? Well, I'm going to call my business exactly what I think people are going to be searching for, an advisor transition services." So, SEO is that simple, people. I had someone call me the day that my website went live because they typed it in and nobody else had used that particular phrasing yet, which to me was amazing.

Michael: Yeah, I will give a shout-out for that of just...like all the different ways that we tend to contort ourselves around naming businesses. I've always been a big fan of it is a completely validating strategy to just literally name the business for what it does. At best, people are outright searching for those words and your business comes up because those are the words. At the least, nobody has to...if anybody is referring advisor transition services, you don't have to explain what they do. So, like, "We have New Planner Recruiting, guess what we do?"

Grier: And during this conversation, I'm sure I will go through all the different ways that I get referrals from different places, but Google is one of them and it's a significant one. I probably get at least one call a month where someone just calls me up or sends me an email and said, "You know, I Googled and found your business on the internet." And there's something to say for that when you name your business exactly what you think people are looking to find and you are doing something that not a lot of other people do, then you're right, there's no question over what it is that you do. There's no research really that you have to do, people will just pick up the phone and call me. And it wasn't necessarily something that I thought would be all that successful. It was just one of those things where I said, "Well, I'm not going to name it like my name, I'm just going to go ahead and name it what I think people will look for."

"Well, I'm not going to name it like my name, I'm just going to go ahead and name it what I think people will look for."

Using Excel To Track Services Transition Process In Real Time [21:29]

Michael: So, now help us understand more of just what do you do. What does it actually mean to provide advisor transition services?

Grier: Sure. So, I would say that a lot of what we do is consulting in that we help advisors understand what the transition is going to look like, and no transition is the same as the next. You're never going to have the same situation with one as the other. I learn something new in every single transition that I do. Something goes wrong in every transition that I do that was not anticipated. Most of the time, it's not anything major but there's always something that we learned the hard way because we've never seen it before. So, a lot of it is really just consulting with advisors and their teams on what to expect during the transition.

But because I have the background in client services and operations, I can also be those boots on the ground to actually supplement these teams during a transition and help them with all the work that is going to be involved. And again, that completely depends on the situation. In a protocol situation, the only thing that I'm really helping with is protocol data prior to a transition and that's only if the firm that they're leaving has a privacy policy that allows the sharing of that data with third parties. There's a lot of nuances that go into this, but I kind of put everything in chunks.

There's the pre-transition preparation. So, if we're talking about maybe an advisor who is leaving an IBD or an RIA where they are allowed to bring all of their information with them and then they're going to a new RIA, there's a lot of stuff that we can do in that pre-transition preparation to manipulate that data, to prepare that data, to do due diligence on it to figure out exactly what is missing and what might be needed so that we can organize everything and get it ready that once the transition starts, it becomes a very smooth and successful transition.

And then there's non-protocol transitions on the other end where there's really no data that we can prepare ahead of time. So, all we're doing in the pre-transition phases is consulting with the advisors on what they are going to need to collect from clients, how they're going to do that, where they can find this public contact information, what the legal ramifications are of things and working with the attorneys to figure out what the communications with the clients should look like and what you can and cannot do. So, that's kind of pre-transition preparation. There's a lot that goes into preparing for the actual transition, but it all depends on the situation.

And then there's the during the transition and there's a lot of stuff that we can do during a transition. A lot of times we will travel to advisors' offices and be on-site with them and we will have what I like to call the war room where we will set everything up in a conference room and have our computers out. And we'll be opening accounts and inputting transfers, or sending out documents via mail or DocuSign or whatever it is. Again, it's hard to explain exactly what we do without knowing what the particular team or advisor's situation is. But we are advisor advocates, so everything that we do is to help the advisor and their team and prepare them for what is about to happen and to make it as seamless as possible for them and their clients.

And during that process, we track everything. We like to have what I call our master tracking spreadsheet, which we can nerd back out in Excel for a little bit if you want to.

Michael: Yeah.

Grier: What we do is, essentially, if it's a protocol situation or a situation where the protocol isn't really applying at all, we take the spreadsheet with all of the accounts on it and we turn it into a tracking spreadsheet. And so, I put columns in where there's a status, I use lists to have dropdowns in the status column so that there are consistent statuses for each of the accounts and where they are in the process. And every time that you select a status, it will be conditionally formatted to change color.

So, not only are you able to keep track of what the status is, but you're able to keep track of it in a colorful way so that you can look at your spreadsheet and kind of see from a visual aspect what your progress is during a transition. And then we have a dashboard that we usually create that has pivot tables in it that kind of adds everything up so that you can see the percentages of things that have been done, accounts open, transfers done. If you're working with the firm documents for an RIA, if those have been signed.

If you're working with a broker-dealer and you have to do annuities that you have to re-register or whatever it is, we create these spreadsheets and we max them out with as many formulas and colors as we possibly can. So that not only can we keep track of everything, but if somebody says, "What's our progress or where are we in this process?" We can show that to them in I would say real-time. It's still something that we have to update manually, but it's almost real-time. And then we could give progress reports on a daily basis to let everybody know, "This is what we accomplished today, and this is what we have left." And so, everybody's on the same page, and everybody kind of knows what they're working on at all times.

Michael: So, help me visualize, though, what are the things that we're ultimately status tracking to get through? I think offhand – and I've not lived advisor transitions directly – but the things I've got in my head, like, "I'm going to have new advisory agreements everyone has to do, I need to open new accounts, I need to just do all the transfers and make sure all the money moves from all the correct old accounts to all the correct new accounts, multiplied by every single client." Is that the thrust? Is there other stuff? What's just are all the things that I'm going to have to do in a transition?

Grier: The answer is, it depends, but there's a lot of stuff that will be needed in every single situation. For example, if we are doing a protocol transition and we are able to give a protocol spreadsheet to the custodian once the transition starts and the custodian is putting together packages that we are going to be able to send out to clients, then that's one thing. We wait maybe 24 to 48 hours before they turn around those packets, and then a lot of our status is what's been prepped, what's been sent to clients, what clients have actually signed, what has gone into processing. NIGOs, if there's any NIGOs on anything and what the follow-up on that NIGO has to be, whether it's something that we can easily fix as a third-party or it's something that we need to retrieve from the client or if it's something that the advisor can fix just by giving us information.

Michael: So, let me even pause there because I'm not sure everyone's even aware that that exists. So, there is a world where you've got a protocol spreadsheet, so you're walking away with name, address, phone number, email, and account titles and registrations. And so, you can give that spreadsheet to at least some custodians and they, I guess, have their own technology systems to do this. They will prepare a series of packets for all the different clients, I guess either mailers or digital if you want to DocuSign it to the email addresses that are shown. They'll put all the packets together that says, "Okay, well, the client had his IRA, her IRA, and they're joint account," so the custodian will prep 3 new account packages – 2 are IRAs, and 1 is a joint brokerage account. They'll prep all of that stuff and queue it up on your behalf if you can give them the spreadsheet of the protocol information in whatever their appropriate format is.

Grier: Yes, in most cases, the custodians will do that. Now, what the missing pieces, obviously, are all of that other data that is not part of the protocol data. So, let's say, for example, you are doing a protocol transition. And this never happens, but for the sake of ease, we'll just say you have every single piece of protocol data that you possibly can and it's all perfect and you give that all to the custodian at the start of your transition on your launch date. And they put together all of the packets and turn them around into DocuSign format for you within 24 hours and they go ahead and they give them to you in a zip file, or they load them into DocuSign for you and they are ready to send.

Well, that is amazing, and you think, "This is great, and they've done most of the work for me." Well, on those forms, you are actually going to have to input all of the information that was not part of the protocol, and that includes social security numbers, dates of birth. If you're talking about those IRAs, well, those all have beneficiary information that needs to be input, and that includes names of your beneficiaries and possibly things like their social security numbers and their dates of birth. So, when you think about it, there's so much work that needs to go into it even after the custodian has turned around all of that paperwork and given it to you in a format that makes it easy to send.

Michael: But if I'm leaving a protocol firm, I don't necessarily have that either, do I? I'm going to have to send that out with some fill-in-the-blanks for my client, "I'm so sorry, I need you to fill this out again," all the ways that we explain through it.

Grier: That's one way to do it.

Michael: But then I've also got to watch and make sure they actually fill in all the blanks when it comes back because otherwise, this is going to get NIGO-ed and that's part of my review process and follow-up work as these start coming back because not everybody does them cleanly.

Grier: So, that is one way to do it. But like you said, not everybody does them cleanly, and custodial paperwork is confusing enough. I think sometimes to those of us that are in the industry, that when you give it to a client and they are not even sure what account they're looking at, and you're expecting them to fill in the beneficiary information for an IRA that's included with an IRA for the other person, that can get very confusing very quickly. And so, one of our approaches to transition really is to not put the work on the clients. Then, the focus becomes on the advisors making calls to the clients to inform them of what the situation is, that they've left the firm, that they started a new one or they joined a new one, and that they have to collect some information from the clients that they were not allowed to bring with them.

And so, then you can collect information from the clients over the phone or there are some technologies out there nowadays, like Onbord is one of them. Full disclosure, I am the chief evangelist for Onbord, it's a very new thing. But they're a company that's focused on collecting data from the clients in a very easy format. So, it will send a text message to the client. It integrates with Redtail, and then it integrates with Schwab, or I believe they're working on merging right now as well. So, it sends a text message to the client and says, "Here's what's happened, we need to collect some additional information from you. Please log in and give us the missing information."

Either the clients can log in and type in their social security number, their date of birth, and everything, and then it will fill it into a CRM where we can then go into the custodial system and pull that information in and instead of us having to fill it in 12 times on 12 different forms, we can generate the forms then. Or you can call the clients... I have a lot of resources on my website for, "I like to create fillable PDFs for situations."

So, a lot of advisors, they like to call the clients, and if they want to collect the information while they're on the phone with the clients, I can just give them a fillable PDF or print a PDF for them where they're just handwriting in information or they're typing it in while they're talking to the client on the phone so that they're not putting that process on the end client. Instead, they're taking it on and collecting the data so that we can then go behind the scenes and fill all the paperwork so that when we send it to the clients, all it's requiring is a signature instead of a bunch of missing information that is likely to get mixed up and be confusing and not get done quickly. And so, there's so many different moving parts to what can be involved.

Working With Advisors In Non-Protocol, Non-Solicit Agreement Scenarios [34:26]

Michael: So, I see, the core of this is if I'm leaving a protocol firm, I've got enough information to queue up the new account forms and transfer forms, but I don't have enough information to actually get them through. So, either I'm queuing up all forms, I have a whole bunch of fill-in-the-blanks for clients and trying to ask them and nudge them to go through and do it and fill out the forms to get it back and hopefully not do it wrong and I have to go back to them. Or for a lot of us that have both a service mentality not wanting to see this screwed up and trying to make this easier for the clients, we start doing outreach to the clients to say, "Hey, I left my old firm, we're trying to get everything set up for you in the new firm. There was some information I was not allowed to take to protect your privacy, so now I do need to ask for it again."

And so, then we asked for it directly by phone call, text message, with Onbord, whatever the thing is that we're using. But now I've got an additional process: I have to call the clients, I have to get that information, I have to put it in some place, it has to make it to the forms. Right?

Grier: Right.

Michael: All that system process stuff has to get sorted out, especially if I'm going to do this times 50, 100, 200, 300, 400, 500, however many clients that I'm repeating this process across.

Grier: Right, and that's just for a protocol transition. And so, we've already talked about several different ways that you can initiate the work in a protocol transition, but then you've got 2 other types of transitions that are on opposite ends of the spectrum as well. You've got a non-protocol transition where the advisor is coming from a broker-dealer that does not allow you to bring any information with you and that might have non-solicitation clauses in their contracts. And so, those situations are even harder to manage because you don't even have the client's contact information, and you definitely don't know what their account types are or anything.

So, those processes become very focused on the outreach to the client, getting the client to the non-solicitation, which is something that I really refer every single advisor to an attorney to have them talk about prior to the transition to ensure that they are saying the right things, that they aren't soliciting when they're not supposed to be soliciting. A lot of the things that I'm seeing nowadays are like non-solicitation agreements that are drawn up by an attorney ahead of time, the clients are...you know, the advisors will reach out to the clients through whatever public information they can obtain on the internet and say, "This is what's happened, I can't even really talk to you about the situation. Here's a non-solicitation agreement. If you want to learn more and hear about this, this is the document that you need to sign."

And so, those non-protocol transitions become very, very focused and I think that we were talking about this a little bit earlier about the client communications are very, very different in those situations because it's very... there's nothing I can really do ahead of time except help you prepare for what to say to clients and how to kick off the process once that whole solicitation portion of it has been resolved. So, if a client signs a non-solicitation agreement that basically says, "I want to know more about the situation, but the advisor did not solicit me," then that can kind of kick off the process that you would normally have already kicked off in a protocol situation. However, you now have to collect all the client information from them, not just the stuff that you weren't allowed to take during protocol, but everything. You want to confirm all of their contact information, you don't want to just assume that whatever is available publicly on the internet is the way that they like to be contacted. So then, you're...

Michael: So, this is when I'm leaving, I guess these are classically employee-style situations where I'm at a large brokerage firm, retail brokerage, retail bank, a lot of those have these employee...like, "Our clients are our clients, you're only here to service them. If you leave, none of these you're allowed to solicit." And so, if you want to break away, you have to figure out what legal options you even have for some of them to come with you or follow you.

Grier: Exactly. And those are the toughest ones because they are the most... they're the most confusing. Because like you said, the contracts are written out to say like, "These aren't really even your clients." So, if you...and they tend to be the ones that are the most pursued legally, at least from my experience. And those are also the ones I feel like where the advisors are the most scared because nobody wants to be sued in a transition situation, especially when you're leaving a firm and you no longer have your income and your income is going to depend on you convincing clients to come with you to a new firm. And if the firm decides to make that difficult for you in a legal way, then you could really be put into a tough situation. But that's why there are so many very knowledgeable attorneys in this industry that can help you understand what the contract actually says and help you figure out what the communication with the clients should be so that you are following the rules.

But once you get past that part, then that's just the one part of it. Just convincing your clients or getting your clients to say, "I want to learn more," and sign a non-solicitation agreement is just step 1. And then you have to go through all those other steps we talked about, which is...including all of that information-gathering.

And in those cases, you are not going to have the custodian giving you a template that you can fill out that they will put together packets for because you don't have any information you're allowed to bring with you and so you don't know the information.

Michael: And are there particular lawyers you like to use or refer to when people are just trying to figure out like, "What my employment agreement even says and will actually permit me to do or not," in these sort of non-protocol employee transition?

Grier: There are. Yes. Scott Matasar with Matasar Jacobs is like... I've been referring advisors to him forever. I like to call him the bulldog. He just knows exactly what he's talking about and can answer my questions when I have them. And Kimberly Cronin is another one, and then Richard Chen, those are 3 of the advisors that are...or 3 of the attorneys that are on my list. And every time an advisor needs an attorney, I send them my list of attorneys and I...because I trust that those people know what they're talking about because the last thing that I'm going to do is craft an operational plan around advice that I don't trust.

Michael: To me, it's always notable in that context. If you're leaving 1 of these big firms, they have an entire team of lawyers whose sole job is to pursue these. You're dealing with an extremely experienced team. Most of the large firms that do this and pursue these, they have a lot of advisors, you're not going to be the first nor the last who's leaving, so they have lawyers that pursue this for a living. If you're going to fight that fight, you really want someone who's got experience being on the other side of it, not someone who's going through it for the first time.

Grier: And they have deep pockets and sometimes they'll use those deep pockets just to make the process harder for you. Because a lot of times, confusion and time are your enemy. If the clients are getting confused and the clients aren't hearing from you for a period of time, it doesn't matter if you come back to them a week later and you're not in that legal trouble anymore. If they've caused enough legal trouble for you to damage the relationship with you and the client, then they've done what they intended to do and a lot of them will use their resources to do that, and they can. There's nothing that you can really do about it.

So, you want to make sure that you understand completely what the situation is, what your contract says, and make sure that you're not breaking any rules right off the bat that they can use against you in any situation. And so, I realized your intention of having me on was to make this easier for clients... or make this easier for advisors and make them not scared. And I promise you, people have left some of the most litigious firms and it's fine. As long as you're not doing anything wrong, then everything will be fine; you will be fine. But get a good attorney.

The 3 Types of Advisor Transitions [43:17]

Michael: Yeah. But I think it frames well the broader context that you were giving that there's...right? There are 3 different types of transitions. There's, "What happens if I'm just... I'm at one of the subset of firms that just freely allows you to have and keep all of your information and do as you wish," right? There's a subset of RIA platforms like that, there's a subset of independent broker-dealers that are like that, that they're...I don't know if you've got any names for them, I just think of it as open transitions. It's just like, "Yes, you're an affiliate to our firm, but we basically treat them as your clients, you have full access to all of your client information. If you decide to transition, do as you wish."

Then there's protocol transitions, so I get some information and I can leave but there are rules of engagements that I've got to follow, which means there will be some gaps around the amount of private client information you can take that you've got to fill in. So then, you get into creating systems or a calling process or using tools like Onbord to navigate that. And then there's this third category of if you took a job with a non-protocol employee firm, which a lot of advisors do because many of those firms, they've got their own marketing machines, they bring in clients and give you clients to service, which is nice if you're not so business development-oriented and you just want to service clients. It's a nice deal from that perspective.

But as the firms view it, like, "If we get the clients and give them to you to service, they're not your clients to take if you leave." And so, they make employment agreements to restrict that and they are non-protocol firms. And so, if you made a decision in the past to join one of those firms, it's different when you want to leave. And unfortunately, I don't think there's enough out there for when advisors are taking their first jobs to understand the difference between open firms, protocol firms, and non-protocol firms. So, usually, we don't discover this until we're 3, 5, 7, 10 years into our career and getting ready to do a move and, like, "Oh, I've got some restrictions." But I think that's why it's helpful to frame this as you did and to just acknowledge, like, "Yeah, if you joined a non-protocol, employee-style firm that gets the clients and hands them to you, they really are a lot more restrictive, that is part of the trade-off when you take that kind of job."

Grier: And the other problem is, is that the protocol is not set in stone. Firms can join the protocol at any time and they can leave the protocol at any time. I think, at least 1, possibly even 2 of the firms, the major firms that started the protocol are no longer in the protocol, which I find to be... I don't know. It just drives me insane that they started... I think it's all trends in the industry. They started the protocol because they were the major firms that were recruiting with one another. But then when the trend started to go towards the independent market and these advisors were starting to leave the wirehouse world altogether, the protocol was working against them instead of for them. And so...

Michael: I think that was really the big shift because if you put it like that... because Morgan Stanley, I think, was the biggest that left the protocol, right, 4 or 5 years ago after having started the protocol. But as you said, when they started it, recruiting was all going from one wirehouse to another. They were trading advisors, they would try to get more than they would lose.

Grier: They were just writing checks.

Michael: They were writing checks left and right, they were suing each other at the same time for crisscross advisors, right? So, you kind of have the protocol detente that they put in place. But you look at it now, the original protocol, it was literally those 3 big wirehouses and now I don't even know what the number is like. There's like 1,000 firms on the protocol, a huge number of which are RIAs that are part of the protocol to recruit out of wirehouses under protocol because technically, both the departing and... the departing and receiving firms both have to be in the protocol for it to work. So, RIAs would join the protocol to take advisors away from wirehouses. And so, if you're a wirehouse, you're going to be like, "Yeah, we started this with 2 other wirehouses and now it's 1,000 firms, 900 of which are RIAs that are taking from us, this isn't the deal."

Grier: "Yeah, this is not why we started this." And I get why they changed their minds, but it's unfortunate because now you can join a firm that is part of the protocol thinking that if you ever wanted to leave, that you would be able to leave under protocol. But if that firm then leaves the protocol, you are not under protocol protection anymore, I guess you would say. So, I do feel like there are a lot of firms that probably did think that they were safe or safer than they actually are now when they're being faced with the fact that they're no longer under that protocol protection. And so, it's tough.

And I'm glad you said, "As an RIA, you have to join the protocol," because you're right, you have to be in the protocol on both sides. And that's another reason that you want to use an attorney and a good compliance firm when you are doing a transition because just because you're part of a protocol firm now that you're leaving, does not mean that you can use the protocol procedures if the new firm that you're joining is not part of the protocol. So, you better make sure that if you are joining an existing RIA, that that RIA is in the protocol, or if you are starting an RIA, that you join the protocol.

Because I have seen that happen before and it became one of the things that I do and part of my due diligence when I am asking advisors questions about the process is, if they tell me that they're going to go protocol, I have to say, "This may be a dumb question, but is your new firm in the protocol?" Because that's the only way that you're allowed to use the protocol is if both firms are in it. And if it's not, then you don't get protocol. And I think that you're right.

Honestly, most of the situations I do at this point, the protocol doesn't even really apply much anymore. I still do the occasional ones where the advisors are leaving the wirehouses and all that, but now that the independent world has become so popular in the last few years, a lot of the transitions I'm seeing are from existing RIAs from IBDs because a lot of people who left the wirehouse world decided, "Okay, well, I still need a place to house some of my brokerage business, so I'm just going to go to an IBD where it's more independent but it's not necessarily me running my own business yet." And so, they went to the IBD world and then they quickly realized, "Well, I'm still under all of this FINRA, I'm still being asked to do things that aren't necessarily in the best interest of my business. And so, I want to go ahead and leave the IBD world and go fully independent and be an RIA." And so, we do a lot of transitions that are from...that are Protocol Not Applicable is what I call it, PNA. I made that up.

Michael: Yeah, well, I was going to ask. We've talked about the dynamics of protocol transitions, the dynamics of these non-protocol employee transitions that are particularly restrictive. But as noted, a lot of advisors are at independent RIAs or independent broker-dealers where they don't have protocol. It's just like their structure is basically like, "They're your clients, so they're your clients," and they can transition and do as they wish. But there's still just the amount of paperwork and repapering and other stuff that goes with it that I find makes a lot of advisors not wanting to do the transition just for the sheer paperwork-related load of the repapering process.

So, can we talk about that a little? These, as you put them, like PNA, Protocol Not Applicable, this kind of thing that was like open transitions. What does it look like when you're in that scenario, right? I'm at an independent broker-dealer, I'm not part of this protocol employment contract stuff, but I'm thinking about leaving, it seems like a lot of work. What does it take to do a transition? What does it look like for a firm like that?

Grier: It really comes down to the data. If you are in a situation where you own your client data and you can bring it with you, as long as you are able to share it with me...and again, that's something that I like people to review their contracts with their attorneys about and the privacy policies of the firms they are leaving. Because there are a lot of situations where data can be shared with someone like myself, but the firm that you're joining is still not going to take that information ahead of time because of their own protections and because their compliance department saying, "No, we are not going to take the client data ahead of time. We'll take it once the transition starts, you can bring it with you."

But it's on you, the advisor, to be the one to organize all of that. And when you put something like that on an advisor or a team and they are either not necessarily well-versed in that type of organization of data or they're not informed well enough by the team that they are joining of what needs to be taken, then you can also end up in situations where you are having to make all of these calls to clients and collect all of this information that you need because you didn't bring it with you and because you didn't realize that you needed to bring it with you.

And so, one of the huge value adds that we have as consultants is our due diligence process prior to the transition. Going through the book of business, sending me data so that I can actually see the account types that we're working with and I can go through and I can say, "Okay, well, you have like 7 of these trusts where the guarantors are deceased and this new custodian requires you to have the name of the deceased guarantor as well as their date of birth and date of death." That's not something that you are going to naturally think of to yourself in a transition. You're not thinking, "Oh, I need to make sure that I have all the names of the dead people on all of these trusts that were created 20 years ago and all have their dates of birth and dates of death."

But that's something me looking at your data, I can say, "You're going to have a problem when you go to open this account," and the last thing you want to do is have the first call to your client be, "Hey, can you tell me your deceased mom's date of birth and date of death from 20 years ago?" Whatever it is. It's the small things that don't seem like they're very important until you need them and then they are extremely important and they're extremely inconvenient to need at that time when you are doing thousands of them. And so, that's just one example. But a lot of what we do prior to a transition is take this data, manipulate it, go through it, organize it, organize things into account types, organize things into the clients.

So, if I'm going to take a full list of account types and I'm going to tell you, "These are all the clients that are listed as entities or individuals on this account, I need all of their personal information," well, there's things like minors. You might not have had the kids' names, social security numbers, and dates of birth. But if you're going to open up a UTMA, you need to know that information, and it's not something that's probably in your CRM. So, it's not always as easy as exporting your CRM and just taking that information with you or just having a list of the accounts. There's beneficiary information for every single one of your retirement accounts, there's transfer on-death information for any of your taxable accounts that have beneficiaries on them. There's just so many things that you want to get right in the transition so that you are replicating the account from one side to the other.

But also, during a transition, it's a really good time for you to confirm that that is the correct information and it's accurate information. And so, those were the kinds of things that we get really deep into in that pre-transition phase. So, we like to have at least 2 weeks prior to the start of a transition to really go through everything to identify where you might see problems to talk to you about things like, "Hey, this account has an annuity in it, what are you doing with this annuity? Is this something that you are having a friendly broker-dealer for that you are going to need to change the broker-dealer on this direct business and keep it at the annuity company? Or are you trying to bring this in to the custodian? Does the custodian even allow you to hold annuities? Are you going to use a firm like DPL or RetireOne where they're going to be the broker-dealer on your annuities?"

It's questions… it's so, so, so much due diligence, and it's a lot to go through. But the more questions we ask and the more answers we get and the more information we're able to organize and put into a format that's going to make the transition as smooth as possible, the less work is going to be involved in the transition, and there's always going to be a lot of work. But if the work is literally uploading things into DocuSign and hitting a button to click and send, that's a lot easier than me waiting for you to get on the phone, collect 10 pieces of information, fill out all the paperwork, send it all to the client, communicate with the client about it. So, I'll stop there because I've been talking for about 5 minutes straight just about client data. But those are some of the things that you really can think about when you own the client data, like what client data do you really need to bring with you.

Michael: And so, to me, all of that just gets to if you really want to cleanly replicate the accounts from one side to another, there's a lot of prep down to the individual details of literally every account, every holding, exactly what is going to map cleanly. What might need additional data? What's got special circumstances? It's like you're going to have to deal with it, you can just either get blindsided in the moment when something NIGOs or you can have a cleaner prep process upfront so that it's not so bumpy at the time and the clients aren't as disrupted if you have to keep going back to them for more info.

Grier: Right. And each custodian, their process is different. And so, they're still not going to take that information from you ahead of time. They might run a couple of reports of your holdings and tell you which ones are transferable and which ones aren't and if you're going to have any issues with the actual portability of some of the assets that are transferring. But they're not going to necessarily look at an account type and tell you that you need to know who the authorized signers are on that corporation and that you're going to need their home address, stuff like that. These internal transition teams, they do a lot, a lot, a lot, but they can't possibly do everything and it's it's really tough for you to know what those things are.

Grier: And it's… I've tried a million times to try to put this into some sort of format that can teach advisors how to do this on their own, but a lot of what we do is looking at something and asking the right questions to determine if there is other information that we need or if something is going to be a problem, and it's not necessarily something that everybody can do without having done transitions for 15 years, you know? I can tell you... if you have all day, I can tell you some horror stories about transitions that I have been on and what can go wrong that you can't even anticipate. And I usually don't make the same mistake twice, but if the mistake hasn't been made once before, then it can always be made the first time. And so, it's not even necessarily that I make any of the mistakes, it's just stuff that I didn't realize because of a particular transition type or a particular book of business. You know?

Michael: I am curious to hear some of, I guess, the proverbial war stories, but maybe just the places where transitions can turn out a lot harder than you were anticipating for some reasons that you probably wouldn't have realized you should have been anticipating.

Grier: Well, I can say that the manipulation of data is a huge factor in transitions and it can make a lot of things go wrong, especially if you're an advisor who is copying and pasting information or using a template that was provided by the custodian and you aren't necessarily an Excel user. And these templates that are provided by the custodians are usually very, very formula-heavy. They are formatted in a way that makes it easier for them to do what they need to do once they get the information, but it's also very easy for someone to accidentally change all the formatting on a spreadsheet without even realizing it. If you're taking information and doing that Ctrl-D or Ctrl-R and dragging information, you could not even realize that that is messing up formulas that were created in that spreadsheet specifically because they needed them that way.

Michael: Right, it takes as little as you copy a formula across and the reference cell wasn't locked with a little dollar sign, and so the formula moves across with you when it was not supposed to and now all the additional columns are calculating off the wrong thing.

Grier: Yeah, and imagine you do that with the social security number column and now every single one of your clients has the wrong social security number in the spreadsheet and you don't realize it. Well, guess what? You need a W-9 from every single one of those clients because you put the wrong social security number in and that is not something that can be materially changed once the account is open. So, there are just things about data manipulation that can go extremely wrong. And even when you have a number or an address or something, and you drag down a number, it will count the number up if you don't hit the right formatting drag button and say, "Copy," instead of, "Drag," or whatever.

So, I see that all the time where an address will be right on 1 account, but then it'll be the wrong address on the other 5 accounts because the advisor didn't copy and paste, they dragged, and it counted up the number, and so it comes back as a red flag. And so, the NIGOs just... you know, those are really dumb small mistakes that can change the course of an entire transition. And so, if you are not someone that's comfortable with data manipulation, then that 100% is something that you should probably seek out some outside help with. But there's just so much that can go wrong that you just have to kind of plan for the worst and hope for the best and the more preparation you do, the more likely it is that everything is going to go smoothly. And you just have to manage expectations as well, not only your client's expectations, because a lot of advisors just want to get on the phone and go, "Oh, this is what's happening, we're going to send you something to sign, so just expect it in your email." But if that's what your communication to your clients are, then you're setting yourself up for failure from the start.

Your clients aren't going to be mad if you call them and say, "It might be 2 or 3 days before you get the paperwork, this is where it's going to come from, this is what it's going to look like, there's going to be 3 different envelopes, you're going to have to open them up and put in your code from your phone as a text message to open it. And then once you click through on those, we'll let you know once we see everything's done. If not, we'll follow up." If you're just taking an extra 2 minutes to explain what the processes actually going to look like, you could be cutting out 20 minutes down the line where you're having to reach out to your client because they haven't signed the paperwork for 2 weeks or something like that. So, it's all about managing expectations. It's all about expecting things to go wrong, but preparing as much as you possibly can.

The Price (And Time) Of Custodian Transitions [1:02:36]

Michael: So, how much time does this typically take through, I guess, the pre-transition phase... not the one I'm distantly thinking about, I'm actually really, really prepping for transition. But there's the pre-transition work, there's the during the transition, I'm sure there's some post-transition clean up… both the...you know, some subset of NIGOs and such that we've got to deal with, and then just the other training that we have to do in the new systems once we're on the new systems to set up all of our individual parameters. Just for people who haven't been through this before, how long should I be expecting a transition to take from when I really have to start doing the extra prep work to get ready to leave until I'm through the transition work on the other end and I'm just back in my new steady state on the other side?

Grier: Well, the pre-transition phase, I think it depends on the firm that you're joining because a lot of times, if an advisor is also starting an RIA, they are starting a business, you know? So, there's not just you having to worry about your clients and your book of business and how it is going to be portable, but you might be looking for real estate, you might be setting up a business, there's just so much that goes into starting a business on top of this part that will extend your timeline quite a bit. But in terms of the actual prepping the information, we like to have at least 2 weeks with the clients' data, if not more, preferably more – just to get in there and to identify anything else that we might need and to do our due diligence.

But if an advisor or a team is doing it themselves, then I would say they'd want to start at least a month out with the collection of data, the organization of data, and just getting ready for the transition purely from a data standpoint, like a client service standpoint. And then the transition itself, that phase, the first 2 or 3 weeks are going to be the really, really intense time where most of the phone calls are being made and most of the accounts are being opened. And so, when we are doing a project, we usually only spend about 2 to 6 weeks on a project because we're there to get as much done as quick as possible at the start of the project, and then to give you the resources and the tracking to then finish the project on your own so that we're not spending half the year on 1 project.

We are helping as many advisors as we possibly can, we're trying not to... we're trying not to overlap our projects very much and we really don't like to overlap them at all in those first 2 or 3 intense weeks because a lot of times we'll go to advisors' offices and we'll spend 10 to 12 hours a day sitting in their conference rooms with them and we don't see daylight. I've been on a lot of transitions where I get really excited because I'm like, "Oh, I'm going to a new city I've never been in," and then I come home and I'm like, "Oh, I didn't see any of the city at all." And so, for us, the projects are 2 to 6 weeks, but usually 2 months tops. But for the actual team, that transition phase, those first few weeks are the most intense, and then things start to get a mixture between the transition and everyday operations because once they have clients that have transitioned, they start to need things and they have to run the business.

Michael: So, for a firm that wants to hire for help, how far in advance should they reach out to make sure they're on the timeline? Does that make sense, right? I'm assuming if you're going to help me from the 2 weeks before to the 4 weeks after window, I don't call you on Friday and say, "Well, I'm planning on leaving 2 weeks from today. So, the 2-week block is on now, can you come out to my office on Monday?" Obviously, that ain't working, you got other things going on. So, how far in advance would a firm reach out if they're planning a transition at some point in the future that they want help?

Grier: We always say as soon as possible, because a lot of those initial conversations, we can be adding a lot of value just by answering questions and steering you in the direction of some other vendors and stuff that will help you with some of the things that you are needing to do prior to the transition. So, I've had advisors who have reached out to me a year before they plan to transition all the way up to advisors who call me because their transition started and they realized very quickly that they're in over their heads. So, I've done clean-up of transitions before and I've done transitions where...I had 1 transition last year where the advisor was kind of on his own.

He didn't want to tell his staff what was going on and he was splitting from a team that included family members, and so I was really his only resource for quite some time. And I think we had an ongoing relationship for 6 months prior to the transition just because he would call me with all of his questions and ask for advice on things. Not even necessarily things that I knew the answers to, but I would help him through it just being a trusting resource. And that's one of the things that I really pride myself on being for some of these advisors, especially the ones that are trying to do this on their own, and it's because you don't know who you can trust in these situations.

You obviously don't want to tell anybody you work with. Sometimes you don't even want to tell your family members, and sometimes it's a good idea not to tell your family members and your staff. It depends. You know these people best and you know what their reactions can be but I'm always going to be on the conservative side when I'm giving advice on these things. And if there's any question that this person isn't going to keep your secret sealed and not tell a single soul, then you don't want to tell them because I've seen situations before where I've given the advice of not saying anything and they've said something and then they got ratted out and then that becomes an immediate need of a transition.

It's either resign or you're going to be terminated, and if you're terminated, it makes the situation much harder for you than if you immediately resigned. And I've been in that situation before with an advisor...with the advisor that we were starting an RIA for. The custodian accidentally sent all of our welcome packets to the office instead of the advisor's home 2 weeks before we were supposed to leave, and we were supposed to leave on the first of the year. And so, this was right before Christmas. And my ops manager literally comes to my desk and says, "Hey, Grier, what are all these welcome packets for another firm?" And I was like, "Oh, I have no idea."

And so, the adviser was not in the office and I panicked. That was probably the worst situation ever. I called him, I called the attorney, I called his partner, I called the transition consultant. Nobody answered my phone calls and I was just sitting there sweating. And finally, I called the advisor's wife at his house and she was like, "He's under anesthesia for a procedure," and I was like, "I don't care, I need to talk to him right now." And he snapped right out of it, drove into the office, and we resigned right then and there because there was nothing we could do. Our office wasn't ready, we had no computers. Luckily, I had prepped all the protocol data a month in advance, so I had that, but it was...man, it was...

Michael: So, really double-check which address fields you put in which form, and they're supposed to send where.

Grier: Yeah, and be careful who you tell. Like, that was the transition consultant that screwed that one up. But like you said, who knows if the advisor accidentally put his firm address instead of whatever it was? But yeah, these things can be intense. And so, I am always a very confidential, trustworthy resource that you can come to just to talk about your plans, and I don't mind doing that. Like, I started this business for that reason to help advisors with this one process and I feel like...and I have advisors reach out to me all the time and they're like, "This is a confidential conversation, right?" I'm like, "Yes, I would not have a business if this wasn't, but I have an NDA if you want to sign it prior to telling me anything." So, yeah, your original question was when to reach out and I know we went down the rabbit hole.

Michael: No, that's good.

Grier: But yeah, I would say, any time is a good time to reach out because, like I said, even if you don't end up utilizing our services to help with the actual transition, I might be able to answer some questions for you that were just burning questions that you didn't know who to ask because you just didn't know where to turn. And if I'm that person, great. Like, you might think of me later when another advisor is talking about a transition and you might refer. I've had lots of advisors refer business to me that never used me before. And so, when you...and that gets into the whole marketing thing as well. When you choose something that a lot of people need but that not a lot of people do and you name it something very clear, it makes it very easy for you to be the subject matter expert and it makes it very easy for people to remember your name, especially when you have a name like Grier Rubeling. And to refer business to you. So, yeah.

Michael: So, you mentioned as well, sometimes when folks reach out, you're steering them to other vendors that might be a fit as well. So, what other kinds of vendors crop up in this context?

Grier: So, there's Kristen Schmidt and Verity Larsen, they're big on technology consulting. And then there's compliance and legal. I've already given you my attorneys. But there's billing, so I refer lots of billing questions to Lacey Shrum because she's just a very good resource on billing. 

Michael: Awesome, awesome. So, how do you price for this for advisors that ultimately want to engage services?

Grier: So, we price on a project basis, and I would say that the average, the transition costs between $10,000 and $35,000 and that's the...but we also have ad hoc consulting if it's just something where we're not doing the actual work but you want to consult with us on a regular basis, we can do an hourly rate. But yeah, I would say the project prices... there are some that go beyond that $35,000 and those are the ones where you have 5,000 accounts and it's a non-protocol. I've really only had 1 significant 1 and it was a big project, it was massive.

Michael: But that helps a lot, right? I think about this just relative to where advisor P&Ls and economics are for looking at and making changes in the first place, right? If you've got a solo practice with $300,000 of gross revenue, if this change gets you 3 percentage points of better grid payout or better bottom line take-home pay, you're going to recover a $10,000 investment. If you're a $1-million-plus practice, well, you probably have more complexity, so you're going to be at the higher end of the scale. But still, if you can get a 3% profitability improvement by moving to a platform that's better aligned for you, you're going to make back the transition costs in a year. Relative to what advisors often save when they find platforms that are just better fits and the economics and the services align cleanly for them, I would envision most firms, they'll recover this in a year or less in improved economics if they're making a good switch in the first place.

Grier: I completely agree. Our entire model is based on speed and efficiency. And when you focus on speed and efficiency and you do... especially in those situations that you can prepare significantly in advance, when you see the movement of those assets much faster than you normally would, then yeah, we're essentially paying for ourselves.

Michael: Well, I don't even thought about...I would just think about it in terms of you may have better economics on your new platform than your old. But that's a good point as well, that if the fact that I don't know what I'm doing means I transition slower and have more NIGOs and it takes an extra 2 to 4 weeks for money to actually transfer because I can't start billing on it again until it gets there, if you get my accounts over 2 to 3 weeks faster on average than I would have been able to do it on my own, then I can make back the entire cost of the transition just on getting my billing done a few weeks faster, getting my new billing underway a few weeks faster.

Grier: It is nice to be able to say I paid for myself.

The Surprises Grier Experienced On Her Journey [1:15:35]

Michael: Yeah. So, what surprised you the most about building your own consulting business because you've gone down this entrepreneurial endeavor for yourself?

Grier: Right. It's been a journey. People say that entrepreneurism is a roller coaster and they are not lying when they say that. I have had some really, really high highs and I've had some really, really low lows. I've had some anxiety that has been built just because of this. And when you're running something yourself and you are doing it in a project price way the way that you are, you could go through and do one transition where you're like, "Yay, I just made 30% of the income that I made all last year while I was employed." But then you go through 3 months where nobody wants to transition in the summer and you're like, "Oh, my gosh, I don't have any income at all."

So, it's one of those things where I have learned along the way and I've made some... I've had some hard lessons to learn, but I wouldn't change it for anything. There have been a couple of times where I'm like, "Screw this, I hate transitions, I want to quit and go find a job," because I can find a really good job now that everybody knows who I am. But then I think about it and I'm like, "But then I can't work for myself and I can't control my schedule and I have to do what other people tell me," and I don't...

Michael: Who wants to do that?

Grier: Yeah, I don't love that idea. So, I would say that if you can afford to invest in a coach or a consultant upfront, it might be something worth doing. I have a coach now, Natalie Bergsma is my coach and I've been using her for a few years. I wish I'd been using her from the start. She really helps me a lot. I think you know Natalie, she really helps me a lot with my mindset. There's a lot of things that I didn't even realize were...or that I had a problem with until I started a business.

Michael: So, what were the blind spots that cropped up for you that you didn't see coming?

Grier: I think some of the blind spots really were managing my chaos of my business because what I do, what I've chosen for living is transitions, which I think this entire conversation has made it very clear that transitions can be a little bit chaotic. They can be very intense, they can be very long hours, very high risk...high reward, but high risk. You can be dealing with people who are at their most stressed, at their worst even sometimes, and you are the resource that they are leaning on a lot and that can be a lot of responsibility, it can be a lot of...it can just be a lot.

And so, sometimes when I'm finished with a transition, all I want to do is just collapse and not answer my emails for a few days or not go and focus on social media. But when you're an owner-operator and when you're running a business, those things don't stop. And so, there's always things that you could be doing better that you need to be doing, but sometimes you are so invested in someone else's success and doing your job well that some of the parts of running an actual business can fall by the wayside a little bit because there's still things that you have to do but they're not necessarily the things that you love to do.

And so, those are kind of some of the lessons that I have learned is really just being everything to everyone, including myself, and focusing on my mental health and my physical health because I feel like I can always make an excuse to not go to the gym today because I have an extra hour's worth of work that I can do tonight. Or I can always convince myself that my kid can go sit upstairs and wait another 20 minutes for her snack because I'm on an important call or I'm doing something important.

And so, when you have a business, and especially when you work from home and you are one of the few in your business, the lines can get very blurred. And sometimes you just need to step back and really analyze what is important and what is a priority and make sure that you're doing yourself and your family just as much that you are for your clients because you know you want to provide a great service, but not at the cost of your own mental health and the time you spend with the people that you love.

The Low Point On Grier's Journey [1:20:21]

Michael: So, what was the low point for you on this journey?

Grier: So, a few years ago, I got really, really busy, I was doing a lot of transitions, and so I decided to bring on someone to help me. And she was great, she was so good at what she did. But I couldn't anticipate my income, I was paying her a salary, and she was very good at taking instructions and doing what she was asked, but I had to delegate a lot and I had never really managed anybody at that point. And I cared very much about her success as well, and so I think I kept her on longer than I should have at my own financial and mental health detriment just because I wanted it to work so bad. But we just went through a spell of there not being a ton of transitions, and so I was still paying a salary and not making the anticipated income that I thought I was going to.

And so, there were some...it was really tough for me to figure out what my management style was, how to properly manage my finances when I was responsible for another person's salary, and to just figure out how to delegate properly. And so, we did end up spinning her off and she actually started her own consulting business and once we did that, we both improved significantly. But it was a hard lesson for me to learn because I really just wanted...I wanted a team member, I wanted somebody that I could talk to every day, I wanted somebody that I could collaborate with, and I wanted help, but I didn't prepare myself for it.

And so, now I have 2 consultants that are on with me now and I am doing it very differently this time around than I did the first time. They are consultants, they are part-time, they're not my employees. And so, sometimes it takes a hard lesson for you to learn what type of management style that you have and how to properly manage the finances of your business. But yeah, sometimes you just make mistakes and you got to learn from them.

What Grier Would Have Told Herself And Advice For Transitioning Advisers [1:22:33]

Michael: So, anything else that you know now you wish you could go back and tell you 5-plus years ago as you were getting started down this path?

Grier: Yeah, I think when I first started my business, I was so focused on getting something out there that I didn't think about a lot of the cohesiveness of my message and my marketing and everything. So, I wish I had spent a little bit more time on that upfront kind of figuring out just simple things, things like a logo and the colors I wanted to use and the fonts I wanted to use and the services I wanted to offer and the message I wanted to send. And it took me 2 or 3 years before I finally decided that my business was really more about me and the knowledge that I have about this subject matter than it was about me putting the business out there and saying, "This is what we do," and kind of hiding behind the name.

When you go to my website now, it's pictures of me everywhere. It's just like pictures of me and there's stories about me, resources. And when you go on to LinkedIn, I'm not posting much on my company page, I'm posting a lot on my personal page and the things that I post are... yes, I post a lot about transitions, I post a lot of educational things to advisors about this industry and the operations of this industry. But at the same time, I post a lot of things about me because what I realized is that people want to work with me for their transitions because I'm a trustworthy resource and I'm a knowledgeable resource.

And so, a lot of them are coming to me, and a lot of them are starting conversations I have with them with, "Oh, I saw your post on LinkedIn," And I'm like, "That's so cool."

Michael: Very cool. Very cool. So, any other final advice you give for advisors who are considering a transition and afraid of this leap?

Grier: I think you're right to be a little bit scared. It's a scary thing. If you weren't scared, I'd be concerned that you are not aware that the process could be challenging. But many people have done it before you and they've done it with a lot of success. And I've been doing transitions not even by my own choice for the last 15 years, only by my own choice for the last 5, really. And if you have questions or if you're just needing somebody to talk to, I'm happy to be that sounding board. Honestly, a lot of times what is scary is the unknown and when you don't know the answers to your questions, you start to make up the answers in your head.

And sometimes when you make up answers in your head, they can be so wrong or so much worse than what the answer might actually be. So, I think that a lot of times, if these advisors just knew that there was a resource out there that they could reach out to and ask some questions to and get some clarification on some of the process, they would feel so much better about it and they would be able to manage it, and that's what I like to be, that resource.

What Success Means To Grier [1:25:42]

Michael: So, as we wrap up, this is a podcast about success and just one of the themes that comes up is the word success means very different things to different people. And so, as you're going down the successful path of building the business and 5 years in and growing and adding team members, so the business is in a wonderfully successful place... how do you define success for yourself at this point?

Grier: Oh, I think that I define success by being able to utilize some of the talents and knowledge that I have to help others and as long as I can continue to do that, I feel successful. I don't necessarily have to equate my success to any sort of financial level or anything like that. But I think I go back and forth between wanting to grow my business significantly and have it just be kind of small and easily manageable, and I'm constantly redefining what success looks like for myself.

But right now, I think my focus is on finding some other ways to create passive income and to create other educational things for this industry. Much like a lot of the things that you do, I just want to kind of leave my mark on this industry and help people with the marketing as well, marketing themselves, doing this transition, starting a business. So, right now, yeah, I'm kind of tossing around a few ideas of other things that I can add to the business and redefining success.

Michael: That's great.

Grier: It looks different all the time.

Michael: I think that's great. That's part of the reality of life sometimes because this evolves as we evolve, right? Those definitions of success change over time for ourselves.

Grier: And that's okay.

Michael: And that's okay. And that's okay. Well, thank you so much, Grier, for joining us on the "Financial Advisor Success Podcast."

Grier: Thank you so much for having me. It was a lot of fun.

Michael: Thank you.