No one has to tell William Jeter about investors getting wedded to superstitions about the value of dividend growth. Jeter, a financial planner with Abacus Planning Group in Columbia, S.C., an RIA managing $1 billion, lost a client precisely because of that type of bias, he says.

“I couldn’t get her out of that mind frame,” recalls Jeter about the client who was overly attached to dividend growth. The client opted to stay with his firm but fired Jeter.

Other advisors tell parallel stories about clients clinging to dividend growth. Recently, two academics have examined the consequences of investors’ devotion to dividend growth.

“[I]nvestors believe dividend growth is predictable, when in reality, it is not,” two University of Pennsylvania finance professors write in their paper “‘Superstitious’ Investors,” published this month by the National Bureau of Economic Research. The two professors — Hongye Guo and Jessica Wachter — analyze what happens as a consequence of those widespread investor beliefs (spoiler alert: it’s excess volatility).

But, as FAs know all too well, the past does not predict the future in the stock market. “Prices embed the incorrect beliefs about dividend growth, and thus are excessively volatile. … [Then] prices revert to more correct values as the expected growth fails to materialize,” the authors write.

Rather than relying on dividends to address clients’ cash flow needs, Jeter’s firm uses a mix of bond purchases for those purposes, Jeter says. Abacus FAs then select assets for clients’ equity portfolios based on “good balance sheets” rather than dividend growth, he says.

The client who dropped him did so partly because he failed to listen to her before trying to disabuse her of her dividend growth notions, Jeter concedes.

But Sheryl Rowling has observed similar patterns in her clients and she concludes that sometimes a client-advisor separation is the only possible outcome.

It’s not that Rowling, the principal of Rowling & Associates in San Diego, which has more than $340 million under management, doesn’t try to help clients understand the pitfalls of focusing only on dividends growing.

“The best tactic is to educate the client,” she says. “The definition of a stock’s value is the present value of its future cash flows, which means not only the dividends but if you sell it at a gain or a loss,” Rowling reminds clients. “We emphasize the total return,” she adds.

What about when a client refuses to reset their portfolio and wants to keep stocks simply because of their expectations about their dividends growing?

“Clients who cannot see past that, they are not going to stick with you,” Rowling says.