Why I Sold – Part 6: Ensuring a Successful Transition

By Jim Whiddon

April 8, 2014

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Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.

This article is the last installment in a multi-part series exploring the issues Jim Whiddon faced as he decided to sell his practice. To access all the articles in this series, please click on “more by the same author” in the left margin.

Whether you are moving forward with a merger or are still debating whether to do so, you must consider what will happen after you blend with another firm. Here are the three most important elements to keep in mind.

Internal communication

The level to which your employees will support your vision with a new partner depends on how well you communicate to them from the outset the reasons for the merger – not how you communicate with them once the transaction is complete. Getting this critical buy-in requires reaching out to them early.

By engaging your team’s resources in the vetting process, they become a safeguard against any defective logic or incomplete reasoning on your part. Your team’s input adds value over your own ideas when it comes to thinking through the various scenarios that may arise. And if you have been a good manager/entrepreneur, your people will have greater insight in many areas of your firm and can confirm or question your decision-making.

External communication

A host of regulations, procedures and policies will surround communicating your merger to current clients and to the general public. These will vary from firm to firm and from client to client. Advisors considering a merger should engage proper legal and compliance resources early on in the process to ensure all necessary provisions are met. Timing of communication is also important, because anything can happen before the closing documents are officially signed and delivered.

We all know client retention is a major issue that requires the utmost attention and strategy before the announcement is made publicly. Proper messaging is paramount. After all, you are taking this step as a fiduciary with your client’s best interest in mind. Therefore, you want to make sure you can clearly communicate the many advantages and benefits that will come their way as a result of the transaction. The fact that people generally have an aversion to change makes this a challenge, but one that can be easily managed if vigilant.

Initially, assess how to best engage each client individually – what medium does each person typically prefer? To cover your bases, three mediums of communication should be used. The first is a personal telephone call to every client. In each case, consider which elements and resources of the acquiring company that may be of particular interest to them. This personal contact goes a long way toward building confidence among your most important constituents – your clients – that you’ve acted in their best interest.

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