There’s no question that switching custodians is a big undertaking for an RIA. But making a change is well worth the effort if it means you can offer better support, products, or services to your clients.

If you are considering transitioning to a new custodian, you’ve weighed the risks and benefits. You may have thought through some of the steps you need to take to ensure the transition is seamless for your clients and yourself.

However, even the best-laid plans can leave out steps that could make your transition easier. As you move forward, be careful to avoid the following mistakes when switching custodians.

Mistake #1: Not meeting your support team before cementing your partnership.

The attentiveness you receive from a custodian’s sales team isn’t necessarily representative of the experience you will have with your support team. Instead of basing your decision to work with a custodian solely on how the sales team treats you, it’s wise to ask to meet the actual person or team that will support your firm once you’re onboarded.

Some custodians won’t assign a dedicated individual or team to provide support for your firm. Instead, they require you to dial into a call center and work with a different person each time you need assistance. If a custodian doesn’t oblige your request to meet your support team, it may indicate that you won’t have access to consistent support from someone who knows you and your business personally.

Mistake #2: Not putting a transition roadmap in place.

A custodian should be able to show you a clear roadmap of their plan for the onboarding process before you commit to working with them. Without a roadmap, your transition may not go as smoothly as you hope.

Your custodian’s plan should map out the various steps of the onboarding strategy and explain what a custodial transition will entail for your team and your clients. For example, you should receive details about the available training to help you and your staff get up to speed on the custodian’s platform and technology.

The roadmap should also include information about the process of getting updated paperwork from clients. Will the custodian generate or prepopulate forms for you? Do they accept digital signatures?

Each custodian handles onboarding RIAs differently. By discussing the overall transition strategy upfront, you can feel more confident that your custodian can successfully lead you through a smooth transition.

Mistake #3: Not considering your clients’ experience.

As you are well aware, your choice to change custodians impacts your clients. Giving your clients better service, access to additional products, or a more holistic financial experience is likely a driving factor behind your decision to switch custodians in the first place.

While your decision to change custodians may be client-motivated, if the process of transferring assets isn’t client-friendly, you run the risk of unhappy clients. It is important that as you think through what will be required of you and your staff, that you also consider how to make the transition experience as simple as possible for clients. Determine if custodians are truly client-focused by asking questions like, “What solutions do you have in place to make the conversion easy for not only my firm but also my clients?”

Mistake #4: Not asking for resources to share with clients.

The requirement to notify your clients of a change in custodial firms is an excellent opportunity to reinforce key messages about the benefits of doing business with your firm. RIAs that communicate effectively with strategic messaging may be able to secure clients’ long-term business more easily.

RIAs can ask custodians for help crafting messages and communicating with clients about transitions. Consider checking to see if your new custodian has marketing materials available that you can share with your clients to:

  • Educate them on the products and services your custodian offers
  • Sell the benefits of transitioning to your new custodian
  • Encourage buy-in and make clients feel excited about transitioning to a new custodian

Poor communication and a lack of information can contribute to client frustrations. If you don’t make an effort to communicate information to help clients understand the benefits of a custodial transition, you run the risk of not being able to answer clients’ questions.

If you avoid these common mistakes, switching custodians can be a painless and productive process. For more information about how to successfully transition to a new custodian, download: Changing Custodians Made Easy. Then, if you’d like to find out more about the kind of custodial experience Axos Clearing offers, schedule a free consultation.