Have you decided to merge with another RIA? Congratulations! The merger will likely grow your clients and AUM, bring new efficiencies and synergies to your practice, and allow you to offer a more diverse set of investments, products, and knowledge. The new firm will probably benefit you, your new partners, and your staff.
There's one other contingent that you should carefully consider, though before you finalize the deal. It's probably the most important group of people in your practice - your clients.
Your merger will most likely bring a wide range of benefits to your clients - new services, greater support, and more efficiency. However, it could also bring some headaches that may range from very minor to very major. Their online access to their accounts could be briefly interrupted. They may have to get used to new statements and communications. They may have to start working with some new support staff. These issues shouldn't be taken lightly.
Like everything else in your practice, it's critical that you identify both the benefits and challenges your clients will face in the merger and then craft a message to address those issues. Start by drafting a list of the pros and cons for the merger from the client's perspective. What will they be pleased with? What could inconvenience them? What could cause serious friction? If you take the time to answer these questions in advance, you'll be more prepared when actually faced with them.
Once you've identified all the areas of strength and weakness in the merger, craft a communications strategy document. This document should serve as the official guide for all staff communications with clients. It should spell out exactly why you're going through with the merger and how it benefits clients. Your staff members can then use this message as talking points when they're answering questions from your clients.
Additionally, you should determine how you're going to present the merger to clients. There's probably not a right way to do it for every single client. Some may not even give the news a second thought. For others, the merger could be a point of worry. You should tailor your approach based on how you believe the clients will react.
For clients who you feel may be receptive, you could be best served by telling them about your decision to merge in a small group setting. Perhaps you could host intimate dinner gatherings to share the benefits of the merger, prepare them for potential complications, and reconnect with them in general. You may even get some referrals out of it.
For clients who may take the news more harshly, you may benefit from meeting with them on an individual basis. That way you can address their specific concerns and carefully note any questions or points of worry that they may have.
You probably took your time when deciding whether or not to merge. After all, there's a lot to consider. Your clients will feel the same way. Even though the reasons to merge may make perfect sense to you, it could take them time to see it.
Just as you did when you won their business, try to anticipate your clients' objections so you can address them while also reiterating the benefits. Preparation will help you nail the conversation, convey your message, and keep your clients satisfied with your service and your vision.
Phillip Flakes is Co-Founder and CEO of Succession Link