I saw an article this morning that discussed how to cultivate a long lasting bond with clients and thought that I would share it, see link at bottom. Additionally,
I wanted to share the four (4) areas mentioned in the article and provide some additional guidance from IPI’s perspective in which advisors should
be cognizant of when they have deep relationships with their clients.
Fee Reduction/Negotiation: While there is inherently nothing wrong with lowering fees to clients (and it is
often a good idea, when appropriate) it can be a cause for concern when fees are lowered significantly. The concern is twofold. First, the firm
and the advisor still have the same suitability and/or fiduciary duty to the client. Lowering the fees too much can expose the firm to a risk/reward
scenario that is below an approved threshold. Second, sometimes a reduction in fees can raise a flag that the advisor is earning the monies elsewhere
and not disclosing it to the firm. To avoid this appearance of impropriety the advisor should reach out to compliance to explain why they are requesting
a reduction in the fees charged to the account.
Regarding fees, if there is a special circumstance with the client, please note those items in the Comment section at the bottom of Page 1 of the Advisory
Personal Emails/Text Messages: Often, when the relationship becomes more personal advisor and client may begin
corresponding via personal email or text messages. Electronic communications that are considered “business as such” require archiving. Consequently
it is imperative that the advisor knows the firm’s policies and procedures related to such communication.
Please make sure that you are using your designated business email address whether it is under @investment-planners.com or your own domain. If a client
sends you an email or text, then forward it to your business address. Additionally, if you must use your personal email address then cc (carbon
copy) your business email address so the email is archived. Keep in mind that repeated violations of using a personal email address will result
in disciplinary action.
Gifts and Gratuities: On the broker-dealer side there is clear language prohibiting gifts over $100.00. On
the investment advisory side, the concern can arise out of both firm policies and conflicts of interest that may arise. The lines are often blurred
when dealing with a client versus when dealing with a personal friend. The advisor may think it is harmless, but the compliance department likely
Please remember to keep your Gifts and Gratuities Blotter up to date throughout the year and especially with the upcoming holidays. The Blotter will
be reviewed during branch audits and upon request from Compliance. https://investment-planners.worldsecuresystems.com/Intranet/Brokers/Gifts-Gratuity.pdf
Trustee/Executor Appointments: When the advisor/client relationship turns personal it is not uncommon for the client to name their trusted advisor
with such a role. It is often a violation of firm policies and procedures for an advisor to be the trustee, successor trustee or executor on a
This is a violation of firm policy at IPI as it would include possible custody of the client’s assets when an advisor becomes a trustee/executor for
a client. You must inform Compliance and receive approval prior to accepting such a position so we can mitigate any risks for you and the firm.
Link to the Article: