Thomas Giachetti, chair of the Securities Group authored “An Overview of External Transition Planning for the Registered Investment Adviser” which appeared in the September 2005 Charles Schwab Institutional Compliance Review.
To summarize the article in brief, the external transition process involves a number of components, including, from the outset, making sure that the selling and acquiring firms protect their most important asset, their client relationships. Without protection of the client relationships from departing and/or new employees, the seller or acquirer runs the risk of a potentially disastrous result. Coordination of the process (including due diligence) by and among each firm’s professional advisors (e.g., CPAs, attorneys, management consultants, etc.) is also critical to a successful transaction. Prudent planning, comprehensive due diligence and the retention of experienced professional advisors will help ensure a successful external transition process.