I was never very comfortable with this theory, which is probably a big reason why I left that firm. I feel that if the client’s current advisor IS doing a good job for them, then it’s my duty to let them know that and to find out if there are other reasons the client is unhappy (ex: bad service, lack of respect, etc). If I find out that is the case, thenof course I will take on the new client. However, if I find that after reviewing the portfolio and asking the appropriate advisor/client relationship questions, that there is nothing wrong, than I believe to gain a new account is just bad business. Maybe the client was just looking for a second opinion and sometimes, isn’t it just nice to hear that someone did right by you? Whether it’s plumbers, car mechanics or financial advisors I know I feel better when a service that was provided was the exact procedure that needed to be done. Don’t you?
I am challenging every advisor to take on this practice and do the right thing not only by their clients, but their advisor community as well. Once you start practicing this, you will begin to realize that the accounts and assets that come back to you is ten-fold. I’m proof of that.