RIA mergers and acquisitions hit record-breaking deal volume last year, driving significant asset growth across the wealth management industry in the process. But once the deal is done, the real work begins for transitioning firms and, most importantly, for their clients.
A swift, seamless transition from firm to firm is crucial to client satisfaction and retention, but it is often a slow, cumbersome process riddled with inefficiencies. Often it relies on a mix of phone calls, back-and-forth emails with PDF attachments and, for a surprisingly large number of wealth management firms, the exchange of paper documents.
Such an outdated approach is not only time-consuming but is — as anyone who has been part of the practice integration process can tell you — prone to errors, delays and frustration as advisors and their teams spend hours tracking down missing information.
At the same time investors — who, after all, didn’t ask their financial professional to change firms — struggle to complete a cavalcade of forms. Their life is busy enough without filling out additional forms and submitting information. Thus, sometimes clients can hold up the transition process.
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A smarter, more efficient approach is to streamline and automate the data collection process via SMS. By sending texts with secure links to smartphones, clients can submit the required information — including forms ADV 2A, 2B and CRS — on their own time, from any device. Furthermore, automated reminders via text and email reduce the need for advisors and their teams to repeatedly reach out to clients for missing information.
Some might argue that email is just as efficient as texting. But given that texts have an open rate six times higher than emails, according to Snappy Kraken, this leaves a wide gap for clients to avoid or delay account transitions. The client who opens an email days after it’s sent and then, in the midst of other things, forgets to respond, takes the transition process from days to weeks to maybe even months.
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It’s important to note that automating post-M&A client transitions not only speeds up the process but promotes compliance. For instance, vendors that generate their own phone numbers — as opposed to advisors using their personal cell phone numbers to send documents and reminders to clients — ensure that private information is recorded through a secure channel. Each text is annotated in the firm’s CRM, so recordkeeping is preserved.
Furthermore, when documents are delivered to clients via smartphones, their responses are directly recorded in an advisory firm’s CRM system, reducing potential copying errors.
Speedy transactions during the RIA transition period mean firms monetize their investment more quickly while advisors and clients build stronger relationships, whereas inefficient back-and-forth between clients, advisors and staff over account information does nothing but dilute goodwill that has been built up over years, sometimes over decades.
By adopting automated compliance transition tools to aid in the onboarding process, RIAs can eliminate inefficiencies, protect client relationships and accelerate revenue realization. The transitioning firms that embrace this shift today will set themselves apart while positioning themselves for long-term success.
