After reading the comments on my first two posts about "who owns advisory clients," I have to say that you all make good points, but at the same time, you miss THE point. It's an emotional issue, to be sure: One fraught with feelings of disloyalty, betrayal, and ingratitude. Consequently, it's easy to react to those highly-charged feelings with knee-jerk accusations of underhandedness, client-stealing, and yes, Morris, illegality and unethical behavior. Then, once firm owners have morally rationalized their gut reactions, the next step appears clear: have new professionals sign non-solicitation or non-compete agreements so this sort of thing can never happen again.
Let me be as tactful about this as I can: you're focusing on the wrong things, and it's leading you to the wrong solution. Mary Schuh captures the real issue succinctly when she writes: "How does the RIA that provided systems, client service employees, office space, benefits, and everything else that goes into servicing the client to the departing employee get reimbursed for their contribution to the client over the years if the departing employee can "hands off" walk away with the client?"
How does the RIA that provided systems, client service employees, office space, benefits, and everything else that goes into servicing the client to the departing employee get reimbursed for their contribution to the client over the years if the departing employee can "hands off" walk away with the client? The short answer is that they don't get reimbursed.
