Client offboarding for small RIAs: a checklist for when a client leaves
Client offboarding is the set of steps a firm takes when an advisory relationship ends, from receiving the termination notice to closing the file. For a small RIA that means recording the written termination and its effective date, calculating any final or prorated fee as the advisory agreement says, following each account transfer, stopping billing and model assignment, closing client access, and keeping the file under your records retention rules. A short, dated offboarding note ties it all together.
A client emails on a Thursday to say they're moving to another adviser. Someone replies kindly, the transfer paperwork arrives a week later, and the accounts leave. Three months on, the household turns up in the billing run. Or a drift report flags an account that no longer exists. Or someone asks when the relationship ended and nobody can say for sure. Onboarding gets a checklist because it brings revenue. Offboarding needs one because it happens rarely and usually in a hurry.
What should a small RIA do when a client leaves?
Work through the same eight steps every time, in order, and record each one with a date. The table below is the whole checklist. Most exits take less than an hour of actual work spread over a few weeks while transfers complete.
| Step | What to do and record |
|---|---|
| 1. Termination notice | Save the written notice. Record the date received and the effective date under the agreement. |
| 2. Final fee | Calculate any final or prorated fee, or refund, as the agreement says. Keep the calculation. |
| 3. Transfers | Track each account's transfer or closure with the custodian until it completes. |
| 4. Billing | Stop billing from the effective date so the next run doesn't include the household. |
| 5. Models and rebalancing | Remove the accounts from model assignments and rebalancing lists, with the date. |
| 6. Access | Close any client portal or shared-document access. |
| 7. Open items | Note anything still owed either way, and close it out. |
| 8. The file | Mark the client inactive, keep the file under your retention rules, and write a short dated offboarding note. |
How should the final fee be handled?
Exactly as your advisory agreement and fee disclosures describe, and with the calculation kept in the file. If you bill in arrears, the final bill usually covers the part of the period up to the effective date. If you bill in advance, the agreement may call for a refund of the unearned part. Either way, write down the inputs: the period, the value used, the rate, the number of days, and the result. That one line answers most questions anyone will ask later.
What should the offboarding note say?
The note should let someone who never met the client understand how the relationship ended. Keep it to a few lines.
- Termination date and effective date.
- Final fee or refund, and how it was calculated.
- Each account and its transfer or closure date.
- The date billing and model assignment stopped.
- Any open items and how they were resolved.
A worked example
Take a two-person RIA with about 120 households that bills quarterly in arrears. A household with two accounts gives written notice partway through a quarter, with an effective date of the 20th of the second month.
The lead adviser saves the email and logs both dates. The operations person works out the final fee for the days from the start of the quarter to the 20th, using the method the agreement describes, and saves the calculation. The joint account transfers out in nine days. The IRA takes three weeks because of a paperwork query. Billing for both accounts stops from the 20th, and both are removed from their model the same day, so the next drift report doesn't flag them. Portal access is closed once both transfers complete.
The offboarding note, written when the IRA finally moves, is six lines long. When the next quarterly billing run happens, the household isn't in it, and anyone reading the file a year later can see what happened and when.
Where do offboarding steps usually get missed?
They get missed at the hand-off between people or systems, not in the client conversation. Watch for these three in particular:
| Gap | What it causes | The fix |
|---|---|---|
| Household left in the billing run | A bill to someone who is no longer a client, then a refund and an apology. | Stop billing on the effective date, not when the transfer completes. |
| Accounts left in a model | Drift reports and rebalancing lists that look wrong. | Remove the accounts from models on the same day as billing. |
| File deleted, or kept with no end date | No way to show when the relationship ended, or a retention breach. | Mark inactive, keep under your retention rules, write the note. |
When is the full checklist overkill?
If a client has one account, no portal access and no fee owed either way, some steps collapse into a single line. That's fine. Keep the note anyway, and keep the termination date and effective date. Those two dates, and proof that billing stopped, are the part you'll be asked about.
Don't delete a former client's records to tidy up. Retention rules typically require keeping them for a set period, and your compliance consultant can confirm what applies to your firm.
How Advorra supports it
In Advorra, the household, its accounts, the strategy each follows and the billing setup sit on one record, so ending a relationship is a set of changes in one place rather than five. Records stay in the firm's own workspace, and the firm can get an export of its data on request. To see what that record looks like before your next client exit, visit the product page, or read the client onboarding checklist.
A practical checklist, not legal or compliance advice.
Questions advisors ask
What if the client terminates verbally?
Record the call with its date, then ask for written confirmation if your agreement requires it. Note in the file when the written notice arrived, because the effective date may depend on it.
What if only some of a household's accounts leave?
Treat each account separately. Stop billing and model assignment on the accounts that left, keep the rest as they are, and say so in the offboarding note so the household record isn't misread later.
Should I ask why the client is leaving?
It's worth asking once, politely. If the reason is a complaint about the firm's service, it may belong in your complaints log as well as the offboarding note.
Who should do the offboarding steps?
One named person per exit works best, even in a two-person firm. Shared ownership is how a step gets skipped because each person assumed the other did it.
Is this compliance advice?
No. It is a practical checklist. Your advisory agreement, your regulator's rules and your compliance consultant determine your obligations.
See it on a demo firm
Advorra is practice software for independent RIAs: clients, models, IPS, billing and compliance records in one place, on top of the custodian you already use. Built by The CollabHub.
Get in touch