Help prospects leave their advisors

By Bryce Sanders | July 3, 2013 | Last updated on September 21, 2023
3 min read

Why isn’t a prospect signing on with you? She clearly likes you and your proposals, but she doesn’t take the next step. If she’s working with another advisor she probably doesn’t know how to end the relationship.

She probably thinks it has to be done face to face, increasing her anxiety level exponentially. After all, most people don’t want to deliver bad news.

Read: What do you want people to remember about you?

Should the prospect leave her advisor?

Has her advisor done a good job in a difficult market? Has he been responsive to calls and kept in touch? If so, she should probably stay. If the advisory relationship has serious flaws she should leave.

These include taking discretion when it has not been authorized and violating confidentiality by talking about a client’s identity, wealth or other private matters in public. Calling the branch manager should be enough notice.

Other reasons for ending the relationship include:

  • Lack of communication or attention. Managed-money and fee-based platforms pay the advisor to give their clients abundant attention. Some advisors rationalize they’re getting paid anyway and ignore current clients.
  • Overtrading, overcharging. The advisor has a transactional mindset. When the market goes sideways people trade less, but he still needs to generate revenue. He might suggest more frequent trading or focus on products with a higher fee structure.
  • Insufficient skill set. The relationship has lasted many years, but now the client needs estate planning advice. The advisor found his niche in stock trading, so he can’t provide the specialized service she needs.

Read: Before being referred, you must be referrable

Sometimes clients can rationalize leaving when the advisor hasn’t done a bad job.

  • Altruism. The wealthy prospect is attached to a charity. You are a tireless volunteer supporting her cause. You’ve helped her, she wants to help you. She open an additional account, funding it with assets held with her current advisor.
  • Diversification. Global crises have affected banks and brokerage firms. Highly publicized investment scandals lead people to conclude they should spread their money across several institutions.
  • Perception of confidentiality. The client is a familiar face in the community. Her advisor is discrete, but if people see her walking into a specific firm they may speculate about her wealth, so she has her money managed in another city.

Starting the conversation

Do any of these examples describe a prospect’s situation? If so, talk to her about how to structure a conversation with her advisor. It should have three elements: identify the issue, explain why it’s a concern, and determine the action to take.

Here’s an example of how to go about it when lack of attention is the problem:

  • Issue: “Three years ago you suggested we move from trading based on your individual recommendations to working with professional money managers. I agreed.”
  • Why it’s a concern: “I haven’t heard from you in eight months. I know you can’t control performance, but I expected you would call from time to time to let me know how I was doing.”
  • Action you are taking: “I’ve decided to move my account to (firm). I’ve met an advisor who asked how often I would like to be contacted. She also set up a schedule of review meetings to track performance and progress towards my goals.”

Her current advisor will probably object. If he becomes belligerent your prospect should remind him that it’s her money, and repeat her three-pronged rationale. If the advisor is contrite she may choose to move only a portion of her assets.

Read: 3 ways to demonstrate sincerity

Bryce Sanders

Bryce Sanders is President of Perceptive Business Solutions Inc. in New Hope, PA. His book “Captivating the Wealthy Investor” is available on