Every advisor needs to look out for the future well-being of their clients and their firm. Whether it’s preparing for an unexpected scenario or thinking long-term toward retirement, there are decisions you need to make now in order to facilitate a smooth transition for your future successor. Let’s take a look at the decisions involved in succession planning, and how an OCIO can help you prepare for a successful transition that appeases all parties involved.

Why Succession Planning Is Challenging

Until technology advances and advisors are able to clone themselves, you’ll never have two people with the exact same values, philosophies, beliefs, or workflows and systems. Even two advisors who work in the same firm, or may even be related to one another, will still work differently.

So when it’s time for a senior advisor or owner to step down, it can be challenging to build a succession plan that reflects both the retiring advisor’s wishes as well as those of the next-gen advisor.

For this reason, it’s important for advisors to start preparing a succession plan well in advance of any plans to retire or leave the firm. You need to not only think about the reputation and long-term success of your firm, but of the immediate needs of your clients as well. It can be a jarring experience to learn that the advisor you’ve been working with for 30 years is retiring. But the more preparation you can put into facilitating a seamless transition for your clients, the less anxious they’ll be (and hopefully, the less likely they’ll be to leave your firm altogether).

The Role an OCIO Plays During Transitions

An outsourced Chief Investment Officer (OCIO) can be a critical partner to bring in during or before any major transitions happening in your firm. They can work with both you and your successor to understand each of your investment philosophies, what your current responsibilities are, and what needs to happen in order to offer an uninterrupted client experience.

As an unbiased third party, an OCIO’s priority is setting your firm up for success by helping you address all aspects of your investment services and responsibilities within the succession plan. They can provide a second opinion in any areas of concern and identify opportunities to appease both the retiring advisor and next-gen leader.

See an OCIO in Action

East Bay Investment Solutions often works with firms preparing for transition. Let’s take a look at a recent example of how East Bay helped an RIA develop and execute a successful succession plan.

In this case, the founder, we’ll call him Steve, was preparing to retire and transition the firm to the next-gen advisor, Brad. Brad was a very planning-focused advisor, whereas Steve was more interested in the investment side of things. He spent the majority of his time looking at individual mutual funds and researching active managers, which he would change frequently. This was a practice Brad was not comfortable continuing with, which meant the founder and next-gen advisor were at odds about their investment approach.

When Brad and Steve first engaged with our firm, we spent a lot of time talking with both of them to learn more about their individual approaches to investment management. Then, we dove into how we could help them move forward in a mutually agreeable way. We explained what our approach would be from an investment perspective, and how we would think about the client transition from one philosophy to another. We knew that this was something that would take time, and trying to rush it — or force the next-gen advisor to adopt a philosophy he wasn’t happy with — would be ineffectual.

We worked together to develop a transition plan that made sense for both parties involved, and got Brad and his clients to a point where they were all satisfied with the plan moving forward.

This whole process took many candid conversations and full transparency from all parties involved. Both Steve and Brad needed to trust one another, and our East Bay team, in order to execute a seamless transition for their firm and clients.

Managing Family Dynamics

It’s not uncommon for small advisory firms to be run by multigenerational families — mothers and fathers looking to leave the practice to their kids or grandkids. Succession planning for family-owned firms can create an added layer of complexity, as sensitive family dynamics often need to be considered.

Having a neutral, unbiased third-party OCIO can be a big help during the planning process. They can serve as a much-needed sounding board by listening to both sides and sharing their own professional opinion based on what they believe will set the business up for long-term success.

An OCIO can be an incredible asset because they’re invested in the outcome of your firm, but don’t feel any biases or familial ties that may cloud their judgment or decision-making process.

Preparing Your Firm for Transition?

An OCIO can play an integral role in your succession planning by offering sound, unbiased guidance during the transition process. To learn more about how East Bay Investment Solutions can help your firm prepare, feel free to reach out to our team today and schedule time to talk.

Whether you’re a one-person operation or working with a team of talented advisors, your RIA has goals for growth. The challenge is, what can you do to help your firm scale more efficiently?

In the world of financial services, referrals are the gold standard for acquiring new clients. They come with the “borrowed trust” of the referring friend or family member and typically meet the minimum AUM requirement because they run in the same circles as your current clients. With the rise of AI clogging up other forms of digital communication, the value of a referral is increasing. So, do you need to wine and dine your best clients to get more referrals? You can if you want, but at the heart of it, getting more referrals all starts with providing an exceptional client experience.

What does a great client experience even look like?

Most advisors know that they have to go beyond the numbers to be able to really help their clients. To build a comprehensive plan for someone, they must get clear on their goals, dreams, challenges, greatest financial fears, greatest strengths, and more.

Understanding your clients’ needs, preferences, and life goals is the cornerstone of personalized communication. But for most advisors, this is par for the course. How can you build a comprehensive financial plan without knowing these three things?

This means going beyond the numbers to truly get to know your clients. Regular check-ins are crucial. These can be scheduled quarterly reviews or informal touchpoints just to see how things are going.

Tailored advice based on these interactions makes clients feel valued and understood. When it comes to the client experience in wealth management, it’s about making each client feel like they are your only client. For example, if a client mentions a significant life event, like a child going off to college or an upcoming retirement, make a note of it and follow up with relevant advice and support. This level of attention builds strong, trust-based relationships.

Mario and I attended a conference last year where one of the guest speakers spoke about creating an unforgettable client experience and there was something she said that really stuck with us. She said, imagine if your client could rate you on a scale of 1-10 after every interaction, sort of the way you can do with Uber. Would that client give you a high rating? If you’re doubtful or saying no, it might mean some adjustments should be made to how you do things. Sure, maybe it is because you don’t have enough time or are busy trying to onboard that new hire or have surge meetings coming up. But think about this when you meet with your clients: “How can I get a 10-star rating every time?” Now, we know this is shooting for the moon, but hey. At least if you shoot for the moon and miss, you’ll land among the stars. Small improvements over time can make all the difference.

Streamlining Processes

Efficiency is another big one. It is the key to providing a high level of service without burning out. How are you using technology to handle routine tasks such as scheduling, document management, or logging meeting notes? Having the right technology not only saves time but also reduces the likelihood of errors.

Implementing a robust CRM system can help you keep track of client interactions, preferences, and important dates. Automation tools can send out reminders for meetings, birthdays, or important financial deadlines. By streamlining these processes, you can free up time to focus on what really matters: building deeper relationships with your clients.

Proactive Client Management

Anticipating clients’ needs and addressing potential issues before they become problems is a hallmark of exceptional service. This means staying ahead of market trends, regulatory changes, and other factors that could impact your clients’ financial well-being. But regularly reviewing and adjusting your clients’ portfolios can be a huge vampire on your time. Not to mention sending out timely updates and insights that are relevant to their specific situations. For instance, if a new tax law is about to be implemented, you may want to inform your clients in advance and advise them on how it might affect their financial plans.

But let’s be real, this is yet another task on your growing to-do list and you already wear so many hats. And from a numbers perspective, hiring in-house isn’t always the best answer. In fact, there are fewer cases where hiring in-house outweighs using an Outsourced CIO to fill those gaps and open time on your calendar. Imagine having a go-to partner to answer questions you might not know the answer to (and won’t be able to find without hours of research). With East Bay, our clients are able to access a private library of information to use at their disposal, either for their own edification or to share with their clients. And in some situations, our advisors even ask us to sit in on meetings when they are super keen on the investment topic the client is interested in learning about. There are simply so many ways that we can support advisors when it comes to investment management and client education and support. In short, hiring a Fractional Chief Investment Officer, or Outsourced Chief Investment Officer (OCIO) provider like East Bay is one of the most proactive moves you can make.

Creating a Welcoming Atmosphere

Every interaction with your clients should be pleasant and professional, whether it’s in person or virtual. This starts with creating a welcoming atmosphere in your office and extends to your online presence. Ensure your office space is comfortable and inviting, with amenities like refreshments and a pleasant waiting area.

For virtual interactions, invest in high-quality video conferencing tools and make sure your online portals are user-friendly. Promptly return calls and emails, and always be courteous and respectful. A welcoming atmosphere helps clients feel at ease and reinforces their decision to trust you with their financial future.

If you’re unsure if your virtual space looks professional, there are a ton of resources on YouTube about how to look like a pro on camera. With a few small upgrades like adding a ring light or investing in a microphone, you can really improve the look and feel of your virtual client and prospect calls.

Delegating and Elevating

Delegating and elevating is about focusing on what you do best and delegating the rest. For many advisors, this means concentrating on financial planning and client relationships rather than getting bogged down in the minutiae of portfolio and investment management. If you want to focus solely on planning without spending hours on research, an Outsourced Chief Investment Officer (OCIO) might be the perfect solution. A Fractional CIO can handle the complexities of investment management, allowing you to dedicate more time to your clients and deliver a higher level of personalized service. This not only improves your efficiency but also enhances the overall client experience. Less falls through the cracks and clients grow ever more confident in your ability to serve them.

Benefits of Working with a Fractional CIO like East Bay

By prioritizing personalized communication, streamlining processes, being proactive, creating a welcoming atmosphere, and embracing the concept of delegating and elevating, you can significantly elevate your client experience. When clients feel genuinely cared for and well-served, they are more likely to share their positive experiences with friends and family. This leads to a steady stream of high-quality referrals, helping your business grow sustainably and with the right kind of clients. An exceptional client experience not only fosters loyalty but also transforms your clients into enthusiastic advocates for your services.

In this guide, we’ll delve into the pros and cons of tactical vs strategic asset allocation approaches. With this information, you’ll be better prepared to anticipate client mindsets and educate them about differences between each approach.