Common Denominators

FINANCIAL PLANNERS – “I was badly advised” is a phrase I often hear from clients.

Thankfully, not in relation to my advice – but directed at some ne’er do well that they dealt with in the past.

My initial reaction is always sympathy, followed by frustration with the Financial Services industry and its propensity to not cover itself in glory.

But, as I dig a little deeper into the nuance and context, the story starts to unfold a little more and the other side of the tale introduces itself.

And this is important, because in any conflict, responsibility is normally shared to some degree and it’s the role of the neutral to identify on which side of the scales it weighs the heaviest.

Although it starts with the phrase, “I was badly advised,” careful diagnosis reveals the scale to which the clients themselves perhaps contributed to their own misfortune.

There are 5 categories on the spectrum, each with its own challenges:

• The Innocents – These clients are genuinely innocent and have been misled into something they shouldn’t have been, because they trusted the advice of someone who should have served them better. Take them under your wing and do what you can to, in the words of Sam Beckett, “put right what once went wrong”. Ziggy will be proud.
• The Naïve – They are very similar to The Innocents, but have been led into something that, well, maybe should have smelled a little off. While this doesn’t make it their fault, it should alert you that they could be led astray again under your watch. This should be a prompt for you to do the Financial Services equivalent of moving the best China to a higher shelf, installing a stair gate and putting bumpers on the table corners.
• The Greedy – Almost every scam relies on greed to some extent, as greed blinds us to the risks. If your client has invested all their pension money into an off-plan Bolivian apartment complex sold to them by a man in an airport, they must take some responsibility for the entirely foreseeable outcome. Your problem is that they’re still greedy and likely to repeat their mistakes, so you’ll need to be both their minder and adviser.
• The Grumbler – Often, your initial sympathy for the client can shift to sympathy for the previous Adviser once you hear more about the ‘bad advice’. Sometimes, the client sets unrealistic expectations, and when these aren’t met, they decide someone must be to blame. Do you really want this client? Were they truly badly advised? Or do they want something that can’t be delivered? Is there an Adviser somewhere celebrating finally getting rid of ‘Awkward Dave’?
• The Litigator – Some people just love to complain. It’s a hobby for them. If you gave them a bag of Gold they’d complain it was the wrong bag. I’ve had prospective clients who’ve claimed that they were badly advised by every adviser they’ve dealt with over the last 20 years, whilst proudly showing me their lever arch file of FOS complaints.

And you should take a good look at that file my friend, because if you take them on, you’ll shortly be in it.

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