Getting Fired For The Right Reason

There is nothing fun about getting fired by a client. It creates self doubt as to your aptitude in the services you provide and you always wonder how or why you can do things differently. When Davey Johnson was the manager of the Mets, he turned a losing team into a winner in one year and led them to a World Series two years later. After the 1986 championship, 1987 was a wash because of injuries and Doc Gooden’s cocaine problem. 1988 was a division title and a heartbreaking loss in the League Championship Series to the Dodgers (thank you, Mike Scioscia and Orel Hershiser). 1989, they won less than 90 games for the first time since 1983 and thanks to us unreasonable Mets fans, we asked for Davey’s head. Davey got a lot of criticism, but success will make you greedy. I’ll never forget when someone called into the sports radio channel, WFAN, and asked Davey “whether he was hired to be fired” meaning that there is always an end to a relationship and it usually it ends ugly.

While I don’t have Davey’s track record, I have been fired by a couple of clients in 12 years and most of the times, it was for the right reason. I was once fired by a plan sponsor that was going through a Department of Labor (DOL) audit of a trustee directed 401(k) plan. All of the plan’s assets were in one investment, a privately held company that was run by one of the relatives of the owner of the plan sponsor. When an unrelated, plan trustee was interviewed by the DOL, he claimed to have no knowledge of what the investment was.  The DOL agent reviewed the company and thought that it was some ponzi scheme or other suspicious investment (perhaps a prohibited transaction). I was working with the DOL agent and he agreed to drop his suspicions if I could get some backup as to the legitimacy of the business. I always cooperate with the DOL because when you avoid them or don’t cooperate, the power of subpoena and litigation is something I like to avoid.

I asked the client for the backup and they couldn’t get what I needed from the people running the company they invested in. Rather than cooperating with the agent investigating them and without contacting me, they supposedly went to the District Director who would look into the situation for them. Nothing came of it, but my services were no longer needed.  The purpose of hiring an ERISA attorney for them to represent them and the clients that let me handle the situation usually do better than those that don’t. I don’t know what ever happened to them, but a trustee who doesn’t know what they invested in is a breach of fiduciary duty, regardless of whether that company was the second coming of Berkshire Hathaway. So sometimes, you get fired for a good reason and the good reason was losing a client that wasn’t cooperating with me or the DOL.

I love these types of stories because they usually are comical. I will never forget a friend of mine who was a salesperson at a third party administrator (TPA). He lost this 401(k) client to a rival because the rival guaranteed that they would pass discrimination testing on salary deferrals, top heavy, and matching contributions. The problem was that the plan was not a safe harbor 401(k0 plan. The plan had no automatic enrollment and no qualified non-elective contributions. How could this rival TPA guarantee passing compliance tests? Your guess is as good as mine, but I have to figure something faked was going on.

I also remember an advisor that I worked with who was fired and re-hired by a client rather quickly. Why the quick turnaround? He was fired by a new Chief Financial Officer who brought in a new advisor. The problem? Well this new advisor was kicking back part of his fee back to this new CFO. Needless to say, this was discovered and both the CFO and the new advisor were out of jobs.

So the lesson to be learned is that getting fired isn’t fun, but sometimes it’s not your fault and you got fired for a good reason, that you were not as illegitimate as the providers hired to replace you.

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