A financial advisor who took over his father's book of business recently moved from a small city in Montana to Salt Lake City. Now he's not sure how to build a book of business in his new home, while continuing to work with existing clients back in Montana.

For advice, we turned to our panel of experts: Philip Palaveev, president of Fusion Advisor Network, an Elmsford, N.Y.-based network of advisors; Hellen Davis, president of Indaba Training Specialists, a management consulting and training firm in Treasure Island, Fla.; and Chip Roame, managing principal of Tiburon Strategic Advisors, a Tiburon, Calif.-based market research and strategy consulting firm for financial institutions and investment managers.

Advisor Brad Thurber faced new business challenges after he and his wife moved from Montana to Utah.

The Situation:

Brad Thurber grew up in Great Falls, Mont., and a few years out of college he moved back to work with his father, who had a practice at D.A. Davidson. But 10 years later, he and his wife decided to relocate to her hometown of Salt Lake City after they learned they were expecting twins. While the move made sense for the family, it meant a difficult transition for Thurber's business. About eight months after making the move, Thurber is trying to draw up a plan for finding new clients and building a thriving practice in his new home.

When Thurber left Great Falls to attend Brigham Young University in Provo, Utah, in the 1990s, he knew he wanted to work with his father at D.A. Davidson. In fact, he'd set his sights on doing so back in high school. But the firm had a policy that you had to work outside the company for two years before partnering with a family member, Thurber says. So he moved to Salt Lake City and got a job working for a financial planner. He also got married and, after two years, he and his wife moved back to Montana in 2000. Soon after, Thurber started working with his father and sister.

Two years later, Thurber's father retired and four years after that, he and his sister split the book and each went out on their own. About half of his more than 200 clients lived in the area, some of them former clients of his father's. The rest were children of deceased clients, many located in Seattle, Portland, Ore., and Minneapolis.

Then a year ago, Thurber and his wife got the news that they were going to have twins; they already have a 4-year-old. Thurber's parents both travel quite a lot and he and his wife realized they were going to need some help. So in June, they moved back to Salt Lake City to be closer to his wife's family.

Trouble is, for Thurber this meant starting a new business practically from scratch, while keeping his old clients — a tall order, to say the least. Thurber now makes an eight-hour-drive back to Great Falls once a month for a one-week stay to visit his clients there. He also visits his other far-flung clients once a year or so. He has a registered assistant in both Great Falls and Salt Lake City.

But his real concern is developing clients in his new home, especially because it's a much different environment from his old stomping grounds. Thurber's plan has been to form relationships with attorneys and CPAs, as he did in Great Falls, but it's a much harder road to climb in Salt Lake. “In Great Falls, everybody knows everybody and it's easy to do,” he says. “In Salt Lake, where there are hundreds of attorneys, it's a different story — much harder to replicate.” So far, he's found a few new clients and has met with their lawyers, but he needs to network with many more.

In addition, Thurber faces another challenge. Many of his clients, including those he's brought in on his own, as well as people who were originally his father's accounts, are retirees or soon-to-be-retired; their average age is late 60s. As a result, he wants to find a way to reach out to the next generation, so they will stay with him.

With just $60 million in assets, Thurber knows his practice “isn't huge.” But as it grows, he wants to hire more people in Salt Lake. He also feels ready to go to the next level. The twins were born in July and, he says, “I just recently started coming out of the fog.”

The Advice:

Philip Palaveev

I've known a number of advisors over the years who relocated from one place to another. And I think that just about all advisors who have relocated successfully will tell you it took a very long time, as much as five years, to get any kind of traction in the new market. This is a relationship-driven business. If you're relying on relationships to create opportunities and referrals, it takes a long time to get established and for those relationships to come to fruition. You're a stranger, and people need to get to know you. For that reason, my first advice is to have patience. You have to establish yourself, and it doesn't happen quickly. Unfortunately, I have no magic bullet to address that.

For attorneys and CPAs, probably the first thing I would emphasize is what is unique about his expertise. What does he know better than anyone else? What does he do that trumps other advisors? Attorneys are inundated by advisors looking for referrals. He needs to show them his differentiating expertise.

That means thinking a bit about his expertise, skills, and experience before contacting anyone. Is it a technical specialty? Does he excel at financial planning? Or something different?

But he's not going to walk through the door, hand them a business card and have them say, “Oh yes, I have clients I want to refer.” On the contrary, he will encounter some skepticism. And he's going to need to spend some time getting to know clients before they'll start referring him to their attorneys and CPAs.

I think it's a good thing he's with this company. One of the best things about being with a large firm is that you can make use of its resources. They have an established reputation, and hopefully he can take advantage of it. And I would urge him to sit down with his branch manager in Salt Lake and talk about how D.A. Davidson can help in getting him established. Perhaps they can introduce him to a retiring advisor interested in handing his or her book to someone younger. Or they might acquire a book together. These are the kinds of introductions someone in the firm might be able to make.

As for handling clients in different places, I've found that a physical presence in a market is not a requirement for a successful service relationship. You can be in two to three locations. What is important is availability to the client. Being available for meetings when they request one, being able to help when they need help. He's doing the right things — scheduling trips, making sure he's in front of clients at least once a year. It's doable, although it will require some travel.

But he needs to be careful to define the scope of the relationship. He has to be very selective in whom he visits personally vs. whom he has a phone relationship with. He has to think about how to coach clients to expect the level of service he can deliver. It's a matter of consistently telling clients how often they'll have meetings and coaching them to accept a long-distance model for working together.

Still, in terms of developing his practice, having these long-distance clients isn't optimal. If he's going to build a business in Salt Lake he needs to focus his marketing efforts on Salt Lake and less on Great Falls. And he has to be careful not to get sucked into developing too much business in Great Falls. He needs to be OK with the fact that he's going to miss some opportunities in Great Falls because he's not there anymore. Ideally, however, while he may be missing some opportunities, he's creating new ones in Salt Lake.

Hellen Davis

Quite simply, when you start in a new market, you need a new idea to kick-start your business, something that makes you stand out.

One approach is to try a trademarked concept my business uses called Key Family Person or Whole Family Concept. The key person concept as it relates to a business is that if anything happens to that individual, it exposes the business to risk. For the financial advisor, it means having clients look at the whole family — sisters and brothers, nieces and nephews, and others across the family unit — and the risks involved. Maybe, for example, someone has lost a job and the grandfather has taken on the responsibility of a grandchild's college education. If something were to happen to the grandfather, then the kid's education would be at risk. So, you would want to sell them life insurance or do other financial planning to mitigate that risk. Wealthy families often adopt this whole family concept, but middle-class people don't, and that's a mistake.

To that end, he'd put an ad in the paper or a venue where retirees or company executives and mid-level managers go, saying, “You've thought about life insurance for yourself. But what if your sister dies and her kids aren't looked after? What if your father dies and your mother isn't taken care of? We assume mom is going to be OK, but people never have those conversations until it's too late. What if your mother gets sick and you don't want to put her in a nursing home. How are you going to pay for the $50,000 renovation on the house?” He then can run seminars talking about the Whole Family Concept. Just by having those conversations in a new marketing space, he becomes an expert. He can get tons of new business.

The truth is, cultivating attorneys and CPAs in a market where he's not known will take years. He's got to come up with an idea that differentiates himself so he can make money in months. He's also going to have to continue working with his other clients for the time being. He needs the money.

At the same time, however, he needs to step away from his Montana business. He should form relationships with financial planners in the cities in which he has clients and slowly transition the business. Otherwise he won't be able to spend an adequate amount of time in his new market, because he's busy and exhausted from all that travel. He should lock that partnership up with a buy-sell and non-compete agreement. The terms would be perhaps a 75-25 split initially, then 50-50. After that, he'd get 20 percent from referrals that come from his work. Then, as long as there's a firm agreement, he can hand the business off completely. By then, he'll be established in Salt Lake City, and he won't need the money from Montana.

Chip Roame

Clients are the number-one source of referrals. Probably 75 percent of advisors say they get new accounts through referrals from existing clients. So, this guy's got a problem. His clients don't live in Salt Lake City. If he tries his existing clients, he's going to get more in Great Falls.

If he wants to focus on attorneys and CPAs, I think it can work. I always say, if you want to know CPAs and attorneys, you have to walk in their shoes, go where they go. That means focusing on what they read and where their meetings are. Find out, say, where the local chapter of the American Institute of Certified Public Accountants meets and do the same thing for attorney associations. Then try to get on the speakers list. Or, at least, spend some time there. Same thing for publications. He can try to get his business profiled in a lawyer's magazine, write an article, or simply advertise. If he can get himself quoted in the right place, it's a way for CPAs and attorneys to get to know him. He wants them to get the impression that he's intelligent and understands the business well.

Still, meeting CPAs and attorneys is tough if you're trying it cold. He can address that problem by reconsidering his strategy of keeping clients back in Montana. It's hindering growth. Why not sell that business, take the money and redeploy it into buying a business in Salt Lake City? There are tons of little advisories for sale. Now he's in a completely different position. He can ask those new clients for referrals, meet their CPAs and attorneys, and he's a lot better off than before. Keeping clients in Montana, he's tying his hands behind his back.

Best is to meet the attorney or CPA with the client. If he calls up someone referred by a client and, together, they meet with the person, do you think that relationship's going to take a long time to develop? I doubt it. It's the old school way of courting CPAs that takes a long time — cold calling, trying to take them out to lunch. If someone called me up out of the blue, I probably wouldn't have lunch with him, either.