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How to Quit the Right Way: Checklist For Advisors

SuperUser Account posted on December 16, 2014

Resigning from an employer is a big event in an advisor’s career. There are several best practices that you should follow to protect yourself.

Here at the Rummage Group, we have seen it all (including some horror stories) when it comes to advisors resigning. The most important thing to remember when changing firms is not to tell anyone, other than your spouse, business coach or consultant. An advisor should never even mention they are contemplating a move.

People love to spread gossip and if you tell anyone you are considering a change they will most likely tell someone else—inadvertently or not. This is because people love to be the one who brings information to others. So again:Do not tell anyone at any time that you are considering a move.

Most advisors are “employees at will,” which means they can be terminated at any time for little reason. If a manager gets word you are considering a move, your professional life can become unbearable. Sometimes the management team will terminate you before you can resign, which we encounter several times a year.

Being terminated before you can resign causes several problems. First, the old firm can mark your U5 with negative language. Even if the language is not true, you must fight to get it cleared up. This can make the hiring firm delay your start date until the U5 issues have been resolve. Compliance officers are usually cautious and carry a lot of weight (some would say too much at some firms.) If they recommend waiting to hire a fired advisor, management will not typically override their recommendation.

Second, once you’ve been fired the offer might change from the hiring firm. An unemployed advisor is less desirable and worth less upfront money and you’re no longer in a position of strength.

Lastly, being terminated prior to your resignation date is an unexpected event that will cause you and the hiring manager unneeded stress.

When it comes time to resign, it is customary to do so on a Friday afternoon. A financial advisor should never give a manager two weeks’ notice. When an advisor resigns, they are almost always escorted to the door immediately. Even if you were to offer two weeks’ notice, you would likely be escorted out right then. (We’ve seen this happen a few times.)

Resigning on a Friday gives you all weekend to reach your clients. This serves two purposes: It gives you a head start to reach clients before any newly assigned advisors, plus your old firm can’t take any legal action over a weekend. Long weekends are even better, if possible.

When it comes to resigning, sometimes the firm will try to convince the advisor to stay. On rare occasions a counteroffer is made. These counteroffers, if accepted, rarely work out for either party. Once an advisor tells the local management team they have found a better company, there are often resentment and trust issues.

An advisor should never leave a firm because of an upfront signing bonus and should never stay because of a counteroffer retention bonus. If you have decided to leave your firm, hopefully it’s because you feel your growth and quality of life will be better at the new firm – that won’t change with a counteroffer to stay.

When it comes to the resignation letter, it should be very short and to the point. This is to protect the advisor in the rare chance of a lawsuit. All language in the resignation letter can be used against the advisor in any litigation.

For example, let’s say the advisor says something simple in a letter like, “I really appreciate all you have done for me.” Even this can be used against him later if he tries to argue that the company did nothing to help him grow. The only thing that should be put in a resignation letter is the date, your name, signature and one sentence: “I resign my position effective immediately.”

After resigning at 3 p.m. on a Friday, an advisor should immediately go to the hiring firm to complete paperwork, then immediately start contacting clients. All night Friday, all day Saturday and Sunday should be spent speaking with clients.

If you have a non-solicit it basically states (in most cases) you are not allowed to solicit clients for one year after resignation. When dealing with a non-solicit, seek the advice of a securities attorney.

Some would argue it’s your fiduciary responsibility to inform your clients you are no longer their assigned advisor at the firm. Regardless, don’t put anything in writing to your clients until after they move their accounts.

Once you move, your clients will have a lot of questions and it’s best to tell them all the positives about the new firm, rather than beat up the old firm. If the clients feel there are more benefits at the new firm, some will actually ask if they can move with the advisor.


Moving a book takes patience. Clients do not have the same sense of urgency as you. It’s best to drip on them and give them the attention that the newly assigned advisor is not.

Some will move their accounts immediately, but others will take several months or even longer. Remember the old saying: “Out of sight, out of mind,” and call on clients regularly.

Always have something informative to tell them. Give them information on the economy, business, updates on their investment positions, and so on.

Be patient and pragmatic and you will eventually kill them with kindness and positive attention. Before you know it, the ACAT forms will roll in.

Rick Rummage is the founder and CEO of the Rummage Group, a consulting firm for advisors.