Before You Sign: The Due Diligence Questions Advisors Skip
Due Diligence Questions to Ask Before Joining a New Firm
The short answer: Before joining any firm, ask who owns it and when they plan to sell. Ask what you give up if you sell part of your practice, and which technology is live today. Ask which custodians you can use, and whether your current holdings will transfer cleanly. A recruiting presentation will rarely answer these unprompted.
Every recruiting meeting is built to sell. The deck shows the platform at its best, the transition team promises a smooth move, and the upfront number gets most of the airtime. None of that is dishonest. It is incomplete, and the questions below fill in what the presentation leaves out.
They come from Episode 272 of The Resilient Advisor Podcast, where Jay Coulter sat down with Shelby Nicholl. Nicholl founded Muriel Consulting, which guides advisors through transitions, and she hosts the Advisors Off Script podcast.
What should an advisor ask a firm backed by private equity?
Ask who the private equity partners are, when they expect to exit, and what growth target they have set for the firm. Private equity investors always plan to sell eventually. A firm racing to hit a recruiting goal before a recapitalization may behave very differently from one funded by patient, long term capital.
Nicholl draws a sharp line between two situations. Using a private equity backed firm as a platform while you keep your book is one level of exposure. Selling your business to that firm is another. In the second case, the investor's timeline becomes your timeline.
What should you know before selling part of your practice to join a firm?
Some firms require a minority sale as the price of admission. Before agreeing, get clear answers to three questions:
How is the valuation set, and by whom?
How much control do you give up, including tag along and drag along rights?
Can you buy the business back if the relationship does not work?
"When you sell a portion of your business, you're not dating anymore. You're married," Nicholl said. A minority sale can be a sensible way to take chips off the table. Read the agreements as if you will one day want out.
Which recruiting claims deserve the most skepticism?
Two claims come up again and again, according to Nicholl.
"Transitions are easy. We do it all for you." Moving account assets and starting a business are different jobs. An advisor leaving a captive firm also has to form entities, settle tax status, open business bank accounts, lease office space, and furnish it. A transition team that moves assets will not walk you through most of that.
"Look at the new technology rolling out soon." A roadmap is a promise, not a product. Judge the tools that have shipped and are in daily use by advisors in the field.
How can you verify what a firm tells you?
Talk to advisors who already work there, and choose them yourself. Jay Coulter's standing advice: pull the firm's Form ADV, pick three advisors at random, and call them. Most will talk candidly.
Nicholl adds the question that cuts through polite answers: "What are the top three things you dislike about this firm?" It forces a considered response. The pattern across three calls tells you more than any sales demo.
Which of your current holdings could slow down a move?
Proprietary funds and separately managed accounts cause the most trouble. A firm's proprietary funds held in taxable accounts may have to be sold when you leave, which can trigger a tax bill. Nicholl's advice is to keep taxable accounts in widely available holdings that transfer cleanly.
SMA shelves also vary from firm to firm. A strategy available at your current broker dealer may not exist at the next firm. That leaves two choices: liquidate it, or cross the firm off your list. Find out early in due diligence, not after you sign.
Why does custodian flexibility matter more now?
Because a custodian can change the rules on you. On October 1, 2026, Financial Planning reported that Fidelity had notified RIAs holding less than $100 million with it. Those firms have until June 30, 2027 to pass that level or lose their custodial relationship.
Nicholl's view is that independence includes the freedom to move between custodians, so no firm should depend on just one. A multicustodial setup, even one added after launch, gives a firm leverage and options when a custodian's priorities shift.
Broker dealer, existing RIA, or RIA platform: what is the difference?
Another broker dealer: The most common move. In Muriel Consulting's data on advisors leaving Commonwealth, roughly 70% to 75% stayed in the broker dealer channel, Nicholl said.
An existing RIA: Often an acquisition. You sell your business and become an employee of that RIA.
An RIA platform: You keep ownership of your business and your book, but operate under the platform's Form ADV. The platform supplies technology, compliance, and back office support.
Nicholl sees the fastest growth in platforms. They let advisors curious about the RIA model move toward independence now and file their own ADV later.
How does the Titleist Advisor Network answer these questions?
We hold ourselves to the same list. Titleist Asset Management has been free of private equity since its founding in 2003. Advisors in the Titleist Advisor Network can work with several custodians, including Fidelity, Schwab, Raymond James, and Altruist. Our advisor contract states that advisors can leave at any time and take their data with them.
Frequently asked questions
What is an RIA platform?
An RIA platform lets an advisor keep ownership of their business and client relationships while operating under the platform's registration, or Form ADV. The platform provides technology, compliance, and back office services, much like an independent broker dealer does. Many advisors use one as a step toward filing their own ADV later.
Do I have to sell part of my business to join an RIA?
Not always. An RIA platform typically lets you keep full ownership of your book. Joining an existing RIA often involves selling your business and becoming an employee, and some firms require a minority stake as a condition of joining. Ask about valuation, control, and buyback rights before you agree.
Why should an advisor ask about a private equity firm's exit timeline?
Private equity investors expect to sell their stake at some point, often through a recapitalization. That timeline can drive recruiting targets, pricing, and ownership changes at the firm. If you sell your practice to a private equity backed firm, the investor's exit plan directly affects you.
What is happening to RIAs under $100 million at Fidelity?
In early October 2026, Fidelity notified RIAs with less than $100 million in assets on its platform that they have until June 30, 2027 to exceed that level. Firms that do not will lose their custodial relationship with Fidelity and will need to move those assets to another custodian.
What is vaporware in wealth management technology?
Vaporware is technology a firm shows in a recruiting presentation that is not yet available to advisors. The demo may look complete while the product is still on a roadmap. The best check is to ask advisors who joined recently which tools they use every day.
How do I check what a recruiting firm tells me?
Call advisors who already work there, chosen at random from the firm's Form ADV rather than handed to you by a recruiter. Ask each one for the top three things they dislike about the firm. Consistent answers across several calls are more reliable than any presentation.
Watch the full conversation
Jay Coulter and Shelby Nicholl cover the full stay, move, or build decision, including what to negotiate when retention money is on the table. Chapters are in the video description.
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