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4 min read

3 Strategies to Take Control of Your RIA Custodian Transition

Sep 8, 2022 2:00:01 PM

Make a move with confidence and secure the future of your business.

Advisors that decide to launch an RIA are a unique group. They are entrepreneurs who love to have control over their businesses. With every decision, these advisors look to improve the opportunities for their firm, their team, and their clients.

One of the most challenging choices for an advisor to make? Deciding if and when to conduct a custodial transition.

Whether that transition is being forced due to an RIA custodian merger, or if the advisor is looking to receive improved service and technology by switching providers, this transition can take a toll on an RIA. Even RIAs with the best practices and robust growth trajectories can face speedbumps during the move.

Over the years, we have tackled hundreds of these custodial service and technology transitions – each of these transitions is different and poses unique challenges. However, we believe we have found a few key tactics that all RIAs can employ to help drive a successful transition.

Keeping these points in mind could enable advisors to take the reins over their transition and help ensure that they can make this move with minimal impact on their business.

1 - Control Your Data, Control Your Destiny

While custodial service providers hold onto customer data, we recommend that RIAs maintain their own data repository.

Having access to all customer information at a moment's notice removes a major barrier to a successful transition. We have seen countless advisors struggle to properly pull and organize customer data while undergoing a transition when relying solely on the data held by their RIA custodian – it's your firm's data, you should have access to it at all times.

While some custodial service providers like TradePMR take on an open approach to data, other RIA custodians may not. Make sure your RIA understands what data your current provider is willing to share with your firm, and what data they may keep under lock-and-key.

TradePMR believes that RIA data is just that – the RIA's data. The firm prioritizes delivering the data that RIAs want, when they want it.


2- Leverage Your Most Valuable Resource: Your Team

For everything from evaluating providers to conducting a transition, advisors should look to leverage the insights and skills of their full team.

Advisors often only use a portion of an RIA custodian's technology offering. Most of the custodial service providers' capabilities are primarily used by administrative, operational, or trading-focused team members.

These team members inside these platforms have unique insights into what works and what could be better at the firm's next provider. Securing and leveraging these insights can help the team to find an RIA custodian that will support the firm's operations end-to-end.

On top of these valuable perspectives, bringing the entire team into the transition process eases the strain on every team member: more hands can make for less work. Meeting with the complete team and assigning roles and responsibilities through the evaluation and transition process can help limit the impact of the move on the business.

3 - Always Keep Clients Front and Center

Even with the best-laid plans, there can be unforeseen hiccups in the transition process. That's one of the reasons why RIAs need to ensure they're keeping clients updated on the move with transparency and consistency.

With the right messaging, RIAs should be able to get their clients excited about the move. The firm is investing in its business's future, unlocking new technologies and services that will expand and enhance how they serve clients. While there is a lot of excitement with the move, clients can get skittish if they feel that the advisor will be unavailable or distracted during the move.

Advisors should be transparent with clients about what they can expect during the transition—points like timeline, anticipated paperwork, and any changes to service level. Keeping them up to date on the firm's plans and transition progress will help to make sure everyone is on the same page and will keep them excited about the move.




Transitions are Manageable with the Right Steps

Advisors who work with merging custodians are nearing a transition, while hundreds of other RIAs are currently evaluating new custodial service providers. By following these key steps, RIAs can help ensure they complete their move with minimal impact on their business and clients.

If you'd be interested in learning how TradePMR supports RIAs through their transition with white-glove service, we should talk. We can see if TradePMR's offering could be the right fit for your firm and if our team could be the group to help your business reach its next stage of growth.


Written by TradePMR