An important truth about the adviser-client relationship: Your clients own you

Contrary to what one might read in this publication, as well as most others, clients are not cattle — they are not “owned.” If anyone owns anyone, clients own their financial adviser in that they rightfully expect their adviser to serve them honestly and help them make smart financial decisions — decisions that will enable them to buy their first home, put their children through college and live comfortably in retirement. Too often, in the business of providing financial advice, we lose sight of this important truth about the dynamics of the adviser-client relationship. We see this most blatantly in the battle between advisers and the firms they are affiliated with when an adviser quits a firm to join another. As soon as that adviser signals his or her plans to jump ship, the adviser and the firm he or she is leaving launch an aggressive campaign to convince clients to either stay with the existing firm or follow the adviser to the new one.

LAWSUITS ENSUE

Frequently, that campaign results in a lawsuit — with one side accusing the other of employing nefarious tactics to “steal” or retain clients. At the heart of the battle over those clients is the misguided notion that clients are “owned” by one side or the other. Nothing could be further from the truth. Every adviser and every firm should remember this: Your client is yours to lose. Provide good financial advice to your clients and you will not lose them. Be fair and transparent in the prices you charge for your services and you will not lose them. Be helpful, honest and, above all, honorable and you will not lose them. In the end, it doesn't matter if a departing adviser “steals” client names, home and email addresses, phone numbers, and account titles. If clients are not being well-served by that adviser, they will not follow him or her to a new firm. If the clients are, they will follow. It's called free will and it is the basis for all healthy relationships.