Thank you, Mr. Sawtelle.

4 replies [Last post]
doberman's picture
Offline
Joined: 2005-02-22

Reference: 12-16-05 Edition of the The Wall Street Journal, page C-13.
Stephen Sawtelle was a top producing broker with Waddell & Reed (WR), when he was fired in 1997. (No reason given for his termination.) In an attempt to retain his clients, WR immediately hired a telemarketing firm to call each one. (No word on what the  telemarketing script said about the departing Mr. Sawtelle.) WR also sent letters to each client saying that Mr. Sawtelle was "not authorized" to handle their accounts.
Apparently, during this "activity", WR made a point of smearing Mr. Sawtelle's good name to his clients. So, Mr. Sawtelle sued WR and, in 2001, an arbitration panel awarded him $27.6 million dollars for "reprehensible conduct" on the part of WR. (It seems that WR has been fighting this judgment ever since.) Then this year, Mr. Sawtelle finally settled, with WR agreeing to pay him $7.9 million in punitive damages. This is on top of the $1.2 million in compensatory damages and $728,000 in legal fees already paid by WR.
So, why do I say thank you, Mr. Sawtelle? And why shouldn't you also thank Mr. Sawtelle? What better attachment to have on your letter of resignation, than a copy of this reprinted article from the Wall Street Journal? (With the appropriate portions highlighted, of course!) If you ever leave your B/D, this article might give them pause to smear your good name, in an aggressive attempt to retain your clients.

troll's picture
Offline
Joined: 2004-11-29

Excellent idea, dobie.  Of course, when you work in the independent channel where it is acknowledged IN YOUR CONTRACT that you OWN the book of business, one doesn't have to worry about that problem.
This would be the whole "freedom" and "business ownersrhip" thing that we talk about that some folks just don't seem to 'get' as to how it's a major benefit.  It's not really a matter of being able to sell one's book, which is sometimes difficult.  Rather, the abiility to change b/d's or bring in a partner or even child without the interference of Big Brother.
Just food for thought.

doberman's picture
Offline
Joined: 2005-02-22

Joe, thanks for your clarification.
Granted, for the most part, this would not apply to indies. However, if the indie hired or took on a partner and that person left. The issue of how far the indie would go to retain clients might be applicable in this case.
During my years working with B/D's, I was never "officially" encouraged to smear the reputation of the exiting broker in order to retain the client. If I liked the ex-employee, I would have refused such a request, anyway.  
With two holiday weekends coming up, I thought the "Sawtelle" article was especially timely and relevant, since exiting brokers tend to resign during long weekends.  

blarmston's picture
Offline
Joined: 2005-02-26

"With two holiday weekends coming up, I thought the "Sawtelle" article was especially timely and relevant, since exiting brokers tend to resign during long weekends"
Yup... It's pretty much a given that when a three day weekend rolls around, someone is walking into the director's office on a friday morning to resign.... Then its off to the new digs to start scrambling for clients.... It never fails- whether its Memorial Day, 4th of July, Labor Day, etc...

doberman's picture
Offline
Joined: 2005-02-22

doberman:
However, if the indie hired or took on a partner and that person left. The issue of how far the indie would go to retain clients might be applicable in this case.
------------------------------------------
The above sentence should read, "However, if the indie hired or took on a partner and that person left, the issue of how far the indie would go to retain clients might be applicable in this case."
Sorry people, that sentence just didn't make sense as originally constructed.

Please or Register to post comments.

Industry Newsletters
Careers Category Sponsor Links

Sponsored Introduction Continue on to (or wait seconds) ×