Putting a $10 million Price Tag on a Relationship

I recently had lunch with a good friend and a very successful business owner who has been a business partner of mine for several years in another venture.

During our discussion he mentioned he was closing down an investment account with a prominent advisory firm and transferring the assets to another money manager. He was looking for possible recommendations from me.

When I asked what has been the investment performance of the firm he had this portion of his portfolio with he couldn’t really recall. So, I asked if sub par performance was the key issue causing him to move his assets elsewhere? What was the issue?

He said he just didn’t have a good relationship with the person he dealt with at the investment advisory firm. There had been turn-over at the firm and he was now on working with his third advisor with the group. He went on to explain things about the relationship that bothered him. It was clear his mind was made up. The only remaining issue was where to move the assets.

He has a highly diversified portfolio and has multiple investment advisors handling different amounts. He would prefer finding another talented money manager vs. spreading these assets among his existing portfolio managers.

In order to possibly give him some recommendations I needed to know a bit more. So, I asked how much he planned to take away from the one firm and give to one or more new investment advisory groups.

He indicated $10 million!

This single lunch time discussion among two good friends illustrates how critically important are the networking and relationship development skills that I am so passionate about teaching to others. In this case the relationship between two business associates was far more important that the performance being delivered.

How do you think his current investment advisor is going to feel when $10 million gets pulled away from him and his firm?

A question…..are you creating and growing the solid relationships you need in your life to accomplish both your personal and professional goals?

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