Company retains clients from renegades

As advisors wander to other firms, one firm is able to retain a significant level of its clients’ assets

Company retains clients from renegades
What happens when one of your financial advisors decides to join another company or set up in business on their own? Chances are that when your advisor walks away, so do his loyal clients.

However, one company has been able to buck that trend – at least to a fairly respectable degree.
Merrill Lynch spokesman Matthew Card has claimed that the company has retained 40-50 per cent of the assets held by departing advisors during the last three-five years. This places it significantly ahead of its competitors with Cerulli Associates data suggesting that the average retention in these circumstances is just 28 per cent.

So what is the secret to Merrill’s success?

The company claims that its ability to hand on to client assets is down to a combination of brand loyalty and a “goal-based relationship with clients”.

Interestingly, during the 1990s, Merrill would often sue advisors who left the company - however, that has not been the case since 2004 when Merrill became one of the founding members of the broker protocol, which was set up to limit litigation between brokers and their firms. 

However, not all major firms specifically target outgoing advisors’ clients. In fact, Raymond James has a policy in place that it will specifically not target advisors’ clients.