To read part two of Andrew Parish's The Art of the Deal, click here.

In this installment of The Art of the Deal we are going to discuss the “meat” of the recruitment process: Due Diligence. Understand that you are in control of the recruiting process and so the due diligence process should occur on your terms. Having taken control from the first meeting and subsequent back channels - you have put yourself and your team in a great position.

Evaluating the possible fit for your clients, your team, the products and services that are important to you as well as the cultural fit of a potential suitor can be either daunting or enjoyable - it is up to you. The key is being honest and open with your potential suitors. Letting them know that you are evaluating multiple organizations for all of the right reasons (principally your clients) keeps everyone on guard. This allows you to be the “Belle of the Ball”.

Let’s look at four separate areas that are part of the due diligence process and are generally key to the decision making process.

  1. The “Home Office” visit. This particular event can be seen as either crucial in your evaluation....or....could be nothing more than a short vacation to NYC, St. Louis, Charlotte etc. The point I am making is that, if you are looking very closely at cultural fit - this is the right time to get a feel for that particular angle. You will potentially spend a day and a half with local management at the national headquarters of their organization. Is the local management team well respected by their peers “up the ladder”? Do you get along with local management over an extended period of time (as opposed to a lunch or dinner meeting)? Is your business treated with respect? Are your partners treated with respect? Are you seen as a “vital recruit” or simply another piece of the machine? All of these feelings based questions are important if cultural fit is a serious issue for you and your team.
     
  2. The “Technology/Platform” presentation. Frankly, this is significantly more important than the home visit. The platform employed to execute the minute to minute and day to day operations of your team on behalf of clients is HUGE. Sure there will be differences with your current platform, but can you see yourself getting up to speed quickly? This is an important step to include a member of your admin staff, as they generally work with the platform on your behalf. Are all of your vital products and services sufficiently covered on the potential new platform? Any less than two hours spent engaging in a platform discussion/presentation and you may be doing your practice and your clients a disservice.
     
  3. The “Local Office” visit. Taking a look at your potential new digs is generally a cloak and dagger affair. You have to show up late in the evening, so as not to be detected by any former colleagues or staff. Be that as it may, it still serves a purpose. Are your new offices as nice or nicer than your current location? Is the office positioned in a convenient location for clients?
     
  4. “Product Portability”. As important as the technology and platform evaluation is, this one is a close second. Clearly, if there are issues with portions of your book that a potential suitor just can’t handle, it may make for a particularly rough transition for your clients and your team. Issues such as syndicate, money manager cross checks, lending and the like could be possible issues. Make sure that you are not having to leave significant percentages of your business behind.

All of these issues are part of the due diligence process. While the technology and platform discussion can get a bit nerdy, it’s important that your team give you a “thumbs up” in this particular area. A happy administrative staff is vital to any team in transition - as they will be spending extra time on the phone with clients. The last thing you want to have slip out of any of their mouths is “I hate this new system we are using” - YIKES! Similarly the cross checking of product availability at your new firm is just as important, as it will reduce potential confusion at the client level.

Andrew Parish is the CEO and founder of AdvisorHUB and managing director of Axiom Consulting. Follow him @APadvisorhub