A year ago, during a honeymoon-inspired reverie, Jon Moore and his new bride, Justan, hatched a plan for their coming life together. As soon as they could, they decided, they would move from their home in Los Angeles to a place they'd visited many times and had fallen in love with — the less congested, more-relaxed town of Littleton, Colo.
In July, they put the plan into action. Moore, who along with his father, runs The Moore Financial Group, moved his office from LA to Denver, with hardly a hitch. None of his 60 clients, with whom he mostly communicated via phone and e-mail anyway, left the fold.
Judy Griebel wasn't so lucky when she moved her practice. A financial planer affiliated with Raymond James, she migrated from Clearwater, Fla., to Mechanicsburg, Pa., a year-and-a-half ago to be closer to her daughter. However, because the majority of her clients were “seniors who didn't want to deal with 800 numbers and needed a lot of handholding,” she says, she had to rebuild her practice from scratch by gathering referrals though local CPAs and targeting small business owners in need of advice about their retirement plans.
Griebel finally built the practice to a point where she's grossing $100,000. Still, she says. “It's meant dedicating virtually all of my time to building up the business.”
Many on the Move
Like the Moores and Griebel, many advisors decide to move their practices in a quest for a better lifestyle. “There's a pervasive trend toward people moving for a change in lifestyle, and financial advisors are part of that phenomenon,” says Stephen Roulac, CEO of Roulac Global Places, a San Francisco-based consulting firm.
The specific reasons for the moves vary widely. Some might be seeking a climate change; others might want to trade urban living for the country life. But one thing these advisors share is the challenge of setting up shop in a new, unfamiliar place.
For some, that's a piece of cake. For others, it means a long haul.
The simplest moves, of course, tend to be for advisors who can open up a new office of an existing company. It's even more straight-forward if the advisor has a substantial number of clients who aren't local. For instance, more than half of Moore's clients lived outside his home area of southern California, and 20 were outside the state. The practice revolved in large part around long-distance business relationships. “I had an 800 number for 10 years before, and just kept it after I moved,” says Moore.
Such advisors also tend to have an easier time because their moves require less procedural change. Consider Robert Cox. A partner with Quest Capital Management in Dallas for ten years, Cox moved to Oklahoma City last spring to be closer to his extended family and raise his two-and-a-half-year-old daughter in a more low-key environment. When he and his wife made the decision last winter, however, the hard part wasn't determining whether to move. It was how his firm would react. Would he have to build a new business, or would his partners let him open up a Quest office in Oklahoma City?
About six months before the move, Cox approached his colleagues with a proposal: He would open a new branch, where he would continue to work with his old clients, plus bring in new ones. They agreed, as long as “I continued to provide a high level of service and I made a seamless transition,” he says.
To make that happen, Cox, among other things, kept up his former schedule with his assistant, a certified financial planner in the Dallas office with whom he'd worked for two years before the move. Every Monday morning they hold a meeting at the same time they met previously. If Cox is in Dallas, they talk in person; if not, they conduct the meeting over the phone. “I've been able to continue working with a good system, just doing it remotely, instead of developing an entirely new process,” he says. “That's a luxury not everyone has.”
The Holding of the Hands
Even if you plan to continue working with existing clients, however, you cannot expect them to come along without prep work. That means spending some time with each one explaining the move, how things will work in the new place and what changes, if any, are in the offing.
Moore, for one, had to speed up this process when his wife found a new job sooner than expected in Denver, and they made the move well ahead of schedule. Still, he spent three months with phone calls, meetings and preparations to make sure his clients were comfortable with the transition.
But not everyone could make the move that quickly. David Drucker, a planner with Sunset Financial Management, who moved from Bethesda, Md., to Albuquerque, N.M., five years ago, spent 18 months preparing his 100 clients for the move. Many were used to having long meetings with him and, “I needed to put their minds at ease,” he says. “I had the feeling if I dropped this news a few months in advance, I would have lost a bunch of them.” As it was, only one client dropped out.
What Drucker did in the transition period was wean his clients from face-to-face meetings and gradually move from phone conversations to a regular system of email communication. By the time he moved, all his clients had become accustomed to frequent email back-and-forth, instead of face to face interaction. In fact, setting up a solid email relationship with clients before a move is central to maintaining their accounts afterwards, advisors say.
“You need to evolve your practice,” says Roulac. “If you say I'd like to have the flexibility to move to Santa Fe in three years, you have to start positioning your practice so it's feasible.”
Email is isn't the only technology you can use to make a move work. Moore plans to install Web conferencing systems, to allow clients to view what's on his computer screen while they're on the phone. He also uses a long-distance office assistant, based in Texas, who handles back-office functions. For his part, Drucker eventually turned his practice into a completely virtual business, with a virtual CFP, administrative assistant and account administrator.
Still, no matter how comfortable your clients are with a long-distance relationship, you usually can't completely forgo in-person meetings. At the very least, that means scheduling an annual face-to-face review with each client. Drucker, for example, developed a revolving quarterly schedule, during which he flew back to Bethesda and met with a quarter of his clients each trip. Such visits are especially important during the transition, to make clients feel confident you'll remain as conscientious as before. That's why Cox has a made a point of making frequent visits to the Dallas office, flying in probably every other week.
“I've bent over backwards to make sure nothing is disrupted by the move,” he says. “I've probably had more contact with clients than I used to.” He also makes sure to speak to each client on the phone once or twice a month, compared to every six weeks pre-move. In between his visits, Cox's assistant in Dallas also meets with clients, helping with annual reviews and presentations.
Finding a New Home
The other easy way to move is by finding work with a company in the new location. Three years ago, Mark Stempel and his wife decided to flee the Bay area. They wanted some place less crowded and expensive, with the potential for an easier commute. Then Stempel attended a training session in Detroit for reps considering becoming fee-only advisors. Not long after, the founder of the company who offered the training session, Tuscon, Ariz.-based Cambridge Advisors, hired Stempel to work in his office. Stempel sold his existing practice to an enrolled agent, keeping the top five clients, and joined the new firm. A year later, he started his own company, taking 35 clients with him.
But not everyone can make such a clean break. For advisors in partnerships, for example, there are other sticky issues. Drucker and his former partner did not share clients, and while his moving had no direct effect on his partner's business, it caused problems for their four support staffers. Obviously, when he left with half the clients, there wasn't enough work to justify keeping them — and neither partner wanted to let them go. So, Drucker agreed to continue to use the support staff virtually for the first two years. After that, his partner was able to find enough new business to keep their assistants busy on her own.
When partners share clients, however, other complications arise. Kent Hickey and his five former colleagues used a team approach, with three partners per client. Three years ago, when he and his wife decided to move their family to Allentown, Pa., from Orlando to be closer to their relatives, “I didn't feel comfortable taking any of their clients,” says Hickey, who is now an advisor with Journey Financial Advisors. When he moved, Hickey had to start from scratch.
Of course, that's the toughest scenario — building from the ground up. What Hickey did was to hire a business advisor, who helped him form a soup-to-nuts plan. Over five months, they devised a blueprint, including everything from what kind of equipment to buy to where to locate his office and financial projections. Then they figured out how much Hickey needed to save, in order to have money to cover living and business expenses until he could start making money again. As a result, Hickey and his wife had close to three years of living expenses put away before the move — a good thing, too, since it took about two years before he was able to match his previous earnings.
In rare cases, advisors maintain offices in two or more places. Six years ago, Robert Timineri, an advisor with Total Return Advisory in Sausalito, Calif., went on a spiritual retreat in Palm Springs. Three years later, he bought a house there. But instead of leaving it at that, he also set up shop.
Now he spends about a quarter of his time in Palm Springs — two weeks out of every two months, although almost never in the heat of August.
“Working in two places has helped me become more efficient,” he says. As long as he can spend the summer in Sausalito and not the desert, that is.