Jon Henschen Publishes, "“How to Conquer Your Top Fear When Changing Broker Dealers: Client Retention,”

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In his February 21 article, “How to Conquer Your Top Fear When Changing Broker Dealers: Client Retention,” published by ThinkAdvisor, independent channel broker dealer recruiter Jon Henschen provides a roadmap for advisors worried about losing clients when changing broker dealer.

If you want high retention the next time you change broker dealers, talk up the benefits to your clients and they will be much more likely to follow you.

In his latest article, “How to Conquer Your Top Fear When Changing Broker Dealers: Client Retention,” independent channel broker dealer recruiter Jon Henschen looks at financial advisor fears over losing clients during a broker dealer change and offers advice on how to successfully communicate the change.

“If you change your broker dealer, you’re going to lose 30% of your book,” is a fairly common fear expressed by financial advisors when thinking about changing their broker dealer, according to Jon Henschen. And while it is possible to lose clients, Henschen points out that the devil is in the details: where are you leaving from, where are you going to, and why.

A move from a bank to an independent broker dealer has a different impact on client retention, for reasons such as non-compete clauses and legal maneuvers to prevent clients from moving with their advisor. Retention rates may in fact be lower when moving from the bank.

Besides type of broker dealer, other factors come into play, such as the quality of an advisor’s relationship with their clients. Or, in the case of wirehouse advisors, did the advisor build their foundation based on the broker dealer’s name, or because of their own abilities, qualifications and reputation of being trustworthy?

How a move benefits the client versus the advisor varies, with many an advisor being tripped up on how to communicate the move. In the case of wirehouse-to-wirehouse movement, historically it has been the advisor who benefits most from a large sign-on bonus, while the client benefit is marginal at best.

Henschen looks at a variety of broker dealer changes and provides advice on how to manage the client communication in each scenario, providing talking points to frame reasons for the move that will demonstrate to clients that their best interests are in sharp focus.

Examples include:

Moving from Wirehouse to Independent Broker dealer:

  • With an independent broker dealer, we will have many more product choices to offer you, with lower, transparent costs. Most importantly, with no conflicts of interest, we can be truly objective in our recommendations.

From Captive Insurance Broker dealer to Independent Broker dealer:

  • Insurance-owned broker dealers have been getting sold at an increasing rate over the last 10 years, to the point where I need to be proactive and find a stable, solid foundation for my clients before my firm is sold out from under me.
  • Moving to an independent broker dealer will give me the ability to greatly expand the product choices I can offer you, which are especially restricted on insurance products at my current firm.

From Independent Broker Dealer to Independent Broker Dealer:

  • Changing to a broker dealer will lower advisory administration fees will save clients thousands of dollars and open up choices to hold advisory assets with outside vendors such as Schwab or TD Ameritrade.
  • Joining a larger broker dealer at a time when many smaller firms are getting squeezed out of the market due to regulatory expenses will help ensure that my clients and I aren’t caught with accounts frozen due to a firm closing or net capital violation.

Henschen continues his article with the story of an advisor who was able to retain 98% of his clients when he changed broker dealers. This advisor moved $90 million of assets from a smaller broker dealer that was closing due to financial/compliance issues, to a well-capitalized broker dealer with 1,500 advisors. The advisors talking points addressed today’s regulatory environment and the need for a bigger firm with more resources, his investment philosophy and his team’s 83 years combined service delivering results. He was also able to highlight the fact that there would be minimal account disruption by staying with their current clearing firm, and the new firm’s competitive fee scale and ticket charge reduction.

In closing, Henschen observes that when you reconnect with clients regarding a broker dealer change, it’s quite common to uncover new assets to invest or get referrals to new clients that will breath new life into your practice. For advisors contemplating broker dealer change, Henschen advises ,“If you want high retention the next time you change broker dealers, talk up the benefits to your clients and they will be much more likely to follow you.”

Jon Henschen is President of Henschen & Associates, an independent broker dealer recruiting firm located in Marine on St. Croix, Minnesota. With more than 20 years of industry experience, Jon is a staunch advocate for independent financial advisors, and is widely sought after by both reps and broker dealers for his expertise and advice on independent broker dealer topics. He is frequently published and quoted in a variety of industry publications, including ThinkAdvisor, Investment Advisor Magazine, Wealth Management Magazine, Financial Advisor IQ, Financial Advisor Magazine, Investment News and others. You can read more by Jon Henschen at

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