The client takeover

The client takeover

The client takeover

Advisors are sometimes forced to make that tough decision and drop a client. But, what happens when another advisor – all eyes on opportunity – swoops into the rescue?

Dropped clients may be left scratching their heads, feeling like flocks without a shepherd, but all is not lost for them. Once back on the market, they are fair game for another advisor, who may be more apt to take them on.

But is this practice a conflict of interest for advisors?

“Absolutely not,” says Bill McElroy of the William Douglas Group Inc. “If an advisor drops a client for whatever reason, I do not think the new advisor should be concerned at all about taking on the new client. But I would dive deeper into why the relationship ended with the other advisor before I would consider taking on the client.”

Dropping clients isn’t an easy decision, nor is it one that advisors should take lightly. But as McElroy explains, these kinds of decisions are often commonplace in the industry.

“As your business grows, your time becomes more valuable, and it is only natural for advisors to reconsider the relationships they have with some of their clients,” he says.

There are a number of reasons why an advisor would do so, and just as many things to consider before pulling the plug.

Often, the client-advisor relationship influences the advisor’s decision to let the client go and reduce his/her book size. “There might be issues between the advisor and the client,” says David Spence of Canfin Financial Group. “They might not be getting along, or the client might not be taking recommendations or second-guessing (the advisor).” (continued.)


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