If you've been an advisor for a while and have worked for one of the large brokerages or for an independent b-d, chances are good that at some point in your career you've been associated with a firm that has had some serious reputational challenges.  

Perhaps you explained  to clients that your firm had received billions of dollars from the TARP program in the aftermath of the 2008 financial crisis, or was fined millions for LIBOR manipulation.

More recently, Credit Suisse advisors have had to discuss with clients the fact that their firm is exiting the U.S. business, and the complications that have come along with the firm's decision.  

Independents affiliated with Cetera Financial have had to explain to clients changes happening at the IBD's holding company, RCS Capital, which is shutting down its wholesale distribution business and looking for a buyer for its broker dealer network.

While these communications may be challenging, many advisors I have spoken with have retained the loyalty of their clients during troubled times at their firms. They've even successfully transported their clients to new companies, sometimes immediately after these difficult episodes.
That's because these advisors understand the basic principle of client retention: They operate as essential planning experts, strong communicators, and professionals who never lose their cool when their firms run into trouble.  

The advisors say they remain in a position of control, whether employed at the wirehouses or regional broker-dealers, or operating as independents. 


Successful advisors position themselves as maestros or conductors, and everyone else at their practice and firm, including support staff and products experts, as musicians in the orchestra pit. The advisor is the one who selects and marshals the firm's resources on the client's behalf. He or she recommends worthy investment offerings and helps clients stay away from making choices that may not be appropriate for them.

Advisors set up investment programs to enable clients to realize their financial goals (e.g., retirement, college savings), and many planners have told me they demonstrate their command of those programs by working diligently in their clients' best interest. They say they choreograph all the right "best of breed" investment choices for clients, and aren't shy about driving this value proposition home when communicating in client relationships day in and day out.  

Advisors who say they use this approach find the issues affecting their firms are more the firms' problem, and not theirs.  


Another bright spot is that it's relatively easy to move client assets from a troubled wealth management company to another, or to independence. Clients who've been concerned about a firm's problems are typically relieved when their advisor wants to move their accounts elsewhere, planners have told me. They say the reasons for the move are obvious and don't require a lengthy explanation. Advisors say clients feel reassured when they show sound judgment and decisiveness in extricating them from an uncomfortable circumstance.

Anyone who's been in the retail business for a while knows that the fortunes and reputations of firms wax and wane. One year's hot company can be next year's scandal-scarred untouchable. Advisors who communicate well with their clients, showing they are in command of the planning process and know when it's time for an exit, may likely ride out the corporate turbulence with few or no losses to their business. 

Read more: