Brooke’s Note: One of my favorite movies was The Paper Chase — perhaps because it involved lots of stress that I could observe without participation. Any breakaway or custodial change is a massive effort in chasing paper and unfortunately there’s nothing fictional about it. This short column by Glen Shepherd gives a glimpse into some of the specifics of the task and what Rich Arzaga went through twice in one year. See: How I survived switching custodains twice in one year and you can, too And it suggests an easier way.

Successful transitions from one custodian to another depend on quickly transferring a significant percentage of your clients. Transition tasks, often left to sales assistants and office administrators, bog down an office and there is a very good reason for that.

Everyone was busy before the transition and now they are expected to add on a heavy load of tedious tasks to get the transition accomplished. As the advisory business matures and becomes more mobile, there are a growing number of firms springing up that offer help with the transition. See the RIABiz Directory Specialized Breakaway Services companies

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Paperwork primer

This is a primer to give you a sense of the paperwork such a firm ought to handle. This is a partial list. Transition expenses typically range from $.99 to $1.99 per electronic account created. Here’s a list of documents that are likely to be required in any transition.

• New Account Forms and/or Client information sheets

These are not synonymous forms. Different broker/dealers require different forms. Some broker dealers require multiple New Account forms per account, while others simply require a Client information sheet

• Account transfer form for the clearance firm on the account.

• Change of broker/dealer form for every mutual fund, variable annuity or fixed annuity Insurance company product represented in your client’s portfolio.

• Trust certification documents

• Omnibus documents

• Joint account agreements

• Corporate resolution certification

• Transfer on death certification

• 5304 Simple IRA

• 5305 SEP

• Adoption Agreements IRA

• Adoption Agreement Simple IRA

• Adoption Agreement Roth

Then, the crucial task is to get paperwork signed correctly and returned by the client. This requires that the paperwork be prepped so that clients are not intimidated or overwhelmed and can easily see the proper place for their signatures, social security number, date of birth and employment information.

Specialist outsourcing firm

This can be done when the forms are initially printed by a specialist outsourcing firm. They can print red arrows on the appropriate lines as well as a yellow line under the signature area or red lines around a key data field. Each instance of a returned form that is signed correctly reduces the time and difficulty of retrieving this information with follow up calls to the client. For an overview of breaking away, read:11 steps to becoming an RIA without upsetting Merrill Lynch, the SEC or your clients

Paperwork is not complete until every social security number, driver’s license and date of birth is correct. When a client forgets a signature or a small piece of data, it requires extra effort to clean up. Clients must be called and paperwork returned for proper signatures.

If you do outsource the transition, the process will have give you a great taste of the outsourcing firm’s competency and capabilities and whether it has established solid lines of communication. Then, you can consider establishing a longer-term outsourcing relationship.

Glen D. Shepherd, My Office Gurus LLC, provides the expertise, resources, and solutions that give the financial professionals the freedom to successfully capitalize on their own talents and strategically overcome their firm’s challenges. He can be reached at info@myofficegurus.com or 402-359-1452. Go to www.myofficegurus.com for further information.