(This blog post is part of an ongoing Schwab Advisor Services series targeted to advisors, advisor clients and anyone interested in learning more about independent registered investment advisors (RIAs). For more information about what an RIA is, why an RIA might be a good choice for an investor, and to learn a few facts about the fastest growing segment of the financial industry, read our Schwab Talk post Defining the Independent Registered Investment Advisor.

Stay tuned for more RIA industry news on the Schwab Talk blog.)

Thirty-three percent of independent advisors in a 2011 Charles Schwab study¹ said that attracting and retaining clients was one of the potential challenges of joining or starting an independent registered investment advisor (RIA) firm. But according to Tim Oden, senior managing director of business development for Schwab Advisor Services, it doesn’t have to be. Tim says that when it comes to your clients, there’s a right time, place, and way to communicate that you’re moving to the RIA model.

Watch Tim talk about some basic steps advisors can take  to help them prepare and retain their clients or read about them in detail below.

Before talking to clients, learn the rules. Get familiar with the terms and conditions of The Broker Protocol.  It provides excellent guidance for departing advisors to help them avoid any monetary or other liability. It’s also important to work with an attorney who specializes in assisting advisors considering a move.

Give your clients time. During the initial conversation, advisors should be sensitive to the fact that their clients have not had the time to consider the RIA model that they have.  For some, the new model will resonate immediately, but others might need time to familiarize themselves with the change. For those needing additional time, use your first communication as an opportunity to set up another conversation to talk more in depth and allow clients the time to develop questions and make a sound decision.

Manage your emotions. Clients are more interested in hearing about the positive aspects of your transition than the stresses associated with starting a new business. If you’re excited about the change and what it’ll do for your clients, they’ll feed off your positive attitude.

Simplify your initial message. Boil down the complexities into a couple key points that will resonate with your clients. Develop key themes that explain why you’re making this move and focus on what’s in it for your clients. Why is this move beneficial for them?  

Role play. Practice what you want to say with a spouse or trusted friend and ask for feedback. Use role playing as a tool to help refine your message and enhance your delivery.

Host an educational session.  A great way for advisors to spark a deeper discussion is to host a brown bag lunch session or a “lunch & learn” with previous clients to discuss the RIA model. This gives clients time to learn about the RIA industry and ask informed questions.

Make your business tangible.  It’s common for clients to want to meet with an advisor in their new business environment before making a decision, so it’s important to make sure that clients have a good experience if they want to come speak with you. Make sure that the environment in which you meet reflects the message you want to deliver to your clients.

If you have additional thoughts or questions about communicating with clients, share them with us by commenting on this blog. You may also submit questions about making the move to the RIA model for our upcoming Twitter Q&A with Tim Oden. Follow @Schwab4RIAs for information on how to submit a question, as well as guidelines for participating.

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¹ Charles Schwab’s “Transitioning to Independence: IBD Advisors’ Perceptions of the RIA Model” survey, March 2011.

Schwab does not provide legal advice. To address your specific circumstance, contact your legal council.

Schwab Advisor Services™ serves independent investment advisors and includes the custody, trading and support services of Charles Schwab & Co., Inc. (Schwab).

Independent investment advisors are not owned, affiliated with or supervised by Schwab.

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