Who Should a $1 Billion Team Talk to Before a Move?

The short answer: A team managing $1 billion or more usually needs four kinds of advice before it moves, and each does a different job. A transition consultant compares the whole market, including staying where you are, and runs the move; the firm pays Winthrop & Co., and the team never pays. A transition attorney reviews the employment agreements, the Protocol position and the resignation plan, and the team pays its own attorney. An investment banker matters when outside capital or the sale of a stake is part of the answer, and is usually engaged by the team. The destination firm's own recruiters and leaders show you that firm in depth, and the firm pays them. Talk to the consultant and the attorney first, and bring in a banker only if capital is on the table.

At this size a move carries a whole business between platforms: several partners, junior advisors coming up behind them, client associates, and families who borrow against their portfolios, hold private investments and use trust and banking services through the firm. No single adviser covers all of it. What else changes for a practice at this size is set out in what changes when your team produces $5 million or more.

Who does what, and who pays each?

What does a transition consultant do for a team this size?

The consultant's job is the comparison and the move. For a team managing $1 billion or more, the comparison covers the whole market and the firm the team is at now, because a retention offer, a sunset program or a renegotiated arrangement can be the right answer, on terms that depend on the team and its book. Each path is modeled on the team's own numbers: unvested deferred awards, outstanding notes, how revenue is credited among the partners, and what each destination would offer, which depends on the team and its book. That is why the modeling starts from the practice and works outward.

The consultant then tests each destination against the real complexity of the clients: the lending, the private investments, the trust and family office work, and whether each can be in place on day one. For one team managing $1 billion, that meant business and personal banking, lending, institutional bond trading and international capability, all in one place; how that move came together is set out on our page for teams this size. How this role compares with a recruiter's is set out in who pays a financial advisor recruiter, and what a transition consultant does differently.

What does a transition attorney do, and should the team hire its own?

The attorney's job is the team's legal position. At this size that means reading the agreement of every person who might move (partners, junior advisors and client associates alike), along with any team agreement, retention notes, deferred compensation terms and employee non-solicitation clauses. The attorney also confirms whether the current firm and the destination are signatories to the Broker Protocol, plans the resignation, and sets what may be said to clients, by whom and when.

Teams usually hire their own transition attorney and pay that attorney themselves, because an attorney's duty runs to the client who engages them, and a destination firm's lawyers work for the firm. That is also why the attorney comes in at the start, alongside the consultant, before anything is copied, printed or shared with a colleague.

When does a $1 billion team need an investment banker?

A banker belongs in the room when the answer involves selling part of a business the team owns or bringing in capital: a minority stake sold to an outside investor, or a recapitalization. A team at an employee-model firm owns no practice to sell, so this question usually belongs to a team that already owns its business and is weighing a sale or a recapitalization. One investment bank that serves RIAs describes its sell-side work as designed for owners preparing to sell their business, and its capital work as helping firms understand financing options and evaluate lenders. In that work the banker is engaged by the team, on the team's side of the table.

A move to another firm usually needs no banker. Neither does the first conversation about outside capital: whether capital fits at all, and on what terms, can be worked through with the consultant before a banker runs a process. Capital comes as debt from a lender or as equity sold to an investor: debt adds repayment terms and conditions, and equity brings in a part-owner with a timeline of its own, so the team's attorney and its tax adviser review the terms as well.

What should a team not do alone?

Four things go wrong most often.

• Meeting firms before the team has its own numbers. A destination firm's recruiters and leaders know their firm better than anyone, and they work for it. Their meetings are most useful once the team has its own numbers and its own questions; in-house and third-party recruiters compared covers how to use those conversations.
• Moving client data on its own judgment. SEC Regulation S-P requires brokers, dealers and SEC-registered investment advisers to maintain written policies and procedures that safeguard customer information. What records may leave with the team is a question for counsel, settled well before resignation day.
• Telling the team without a plan. When junior advisors and client associates hear, and from whom, carries legal weight; what happens to your team when you move firms explains why.
• Comparing offers on the headline. Every offer depends on the team and its book, and the structure behind each one (the commitment, the targets, and the deferred balance it may replace) decides what it is worth.

What do the consultant and the attorney coordinate?

Junior advisors and client associates. Each person's agreement is read before anyone is approached, and each registered person is registered again by the new firm, which files a Form U4 for them. Their start dates are planned alongside the partners' so that service holds through the first weeks.

The resignation sequence. Who resigns, in what order, on what day, and what each person says. The attorney sets the legal limits; the consultant lines up the new firm's transition staff so that account paperwork, office space and technology are ready the same day.

Client communication. What may be said, and when, is the attorney's call. When the new firm is a FINRA member and, in the three months after the advisor joins, the advisor or the firm first contacts a former customer individually about transferring assets, FINRA Rule 2273 requires the new firm to provide FINRA's educational communication, which asks clients to weigh costs, holdings that may not transfer, and whether financial incentives could create a conflict of interest. FINRA Rule 2140 also bars member firms and their people from interfering with a customer's request to transfer an account in connection with the representative's change of employment, where the account carries no lien for money owed or other bona fide claim.

Lending and alternatives that may not move. FINRA's investor guidance says that to move assets pledged against a securities-backed line of credit, the client will likely have to pay off the loan, so the new firm's lending is lined up first. Under FINRA's account transfer rule, third-party products the receiving firm has no arrangement to hold are nontransferable, and so are the old firm's proprietary products unless the receiving firm agrees to accept them; the client then chooses to liquidate them, leave them at the old firm, take them in their own name or, for a third-party product, move them to the product's sponsor. Each household with a loan, a private investment or a trust relationship is on the consultant's and the attorney's list before anyone resigns.

In what order should a team talk to each one?

1. The consultant and the attorney, together. Confidentiality first, then an inventory of agreements, deferred awards, notes and the households that carry loans or private investments.
2. The paths, priced. Staying, another firm, supported independence, or an RIA of the team's own, each on the team's own numbers.
3. The destination firms. Meetings with recruiters and leadership at the firms that fit, with the team's questions prepared.
4. A banker, if the team owns its practice and a sale or recapitalization is on the table. Once the team knows one belongs in the answer.
5. The resignation. Planned with the attorney and run with the consultant, with the new firm's transition staff ready.

How Winthrop & Co. works with teams managing $1 billion or more sets out what the engagement covers.

Every practice is different. The specific answer comes from a confidential conversation: the best deal we can win for your team through our relationships and our record of past deals, and how culture, technology, support and service compare at the firms that fit, including the one you are at now. Request an introduction.