I have been involved in the business of providing financial advice since 1979. At 57 years young, just when you think you have seen it all, along comes another whammy. Once again, against all the odds, I not only lose a long-standing client but am so shaken by the circumstances that I feel compelled to write this open letter.
Over the last 10 years, the financial planning industry has been overhauled and this process continues. With stricter laws, more dynamic enforcement and a single-minded focus on protecting the consumer, the business of financial planning has become more professional and the consumer has become wiser. This is all good.
Having seen the writing on the wall a decade ago I started to evolve my financial planning practice by introducing a fee-based retainer for my primary clients. This would more effectively underpin the foundation that is essential to sustaining a business driven by long-term relationships.
Transparent, secure, private
The retainer ensured that at least every four to six weeks, I got together with each client to ensure that the planning processes we agreed upon would be delivered. In addition, I invested in technology that enables clients to access their own private space within the platform. This entails access to every historic communication, document or financial detail – in a transparent, secure and private way, at any time and from anywhere in the world.
Between this client collaborative and behavioural technology, face-to-face meetings scheduled a year in advance, combined with ongoing regular communication, feedback, investment reviews every three months and more, we are able to meet the promised and agreed deliverables – professionally speaking.
I am notified via email from a product provider that a primary client (paying a monthly retainer), has replaced his entire life assurance and benefit portfolio with another insurer through another broker. In an instant, this act changes the paradigm of the professional relationship. Not only can I not access or determine what changes have been made and how this will impact on my client’s personal risk, estate, taxes and liquidity planning as well as business succession and continuity, I also have no idea of why …
So I phone my client, with whom I have shared the ups and downs of our personal lives over the years, expecting him to have been duped. My primary concern was to make sure that I was there and available to assist him through whatever the situation may be.
‘Time to move on’
After many attempts he finally took my call, offered no explanation and simply said it was “time to move on”. I asked for one (perhaps a little more assertively than I should have, but I was still in shock) and my client mumbled something about the type of benefits he had, which did not make any sense.
At this point my client indicated that perhaps this should be discussed in person and I agreed to an appointment the following week. I emailed the client multiple times to confirm the appointment and to date, no response.
‘So what?’ you might ask. You win some, you lose some! Perhaps my service was bad? The silly season (October to December), where life assurers (product providers) offering ‘special offers’ on rates, underwriting and incentives suddenly motivates insurance salesman to sell more policies or replace existing policies at cheaper prices and altered benefits. The desire for consumers to pay less for more is hard to balance with needs and long-term thinking – the latter being the hallmarks of my own relationship-driven business.
My question is not about interrogating the right of my client to terminate services or replace his products with those proposed by another advisor for whatever reason they deem appropriate. It is also not about me questioning my client’s decision.
I am the one who will need to stand by you
To all consumers out there who have had the opportunity to deal with a financial advisor, I am a professional, driven to building a relationship with you, your families and loved ones. I am the one who will need to stand by you if your health should fail and we are the ones who need to explain and ensure that your family is at the very least financially supported should you die or become disabled and not be able to earn an income.
I task myself with the responsibility of ensuring that your family and you are financially supported when fate deals you an unexpected hand. Over the years, I have witnessed the power and gratitude of many families that have relied on my expertise and service in trying times. For me, the greatest reward is hoping that nothing befalls you, but if it does, I can look you and your loved ones in the eye and know that my contribution to your life has been beyond necessary and underpinned by a belief that what I do is not for us – but for you. I offer no excuses for my emotional investment in our relationship and will remain committed to the end.
All I ask is that at the very least you have the courage to treat me with the respect that I have earned and allow me the opportunity to listen. I will offer no resistance and even provide you with a summary of the status of your financial and business planning programme to ensure continuity for you and your family.
It seems to me that with the ever-evolving regulatory environment that is designed to protect you and encourage professionals like me to be open, honest and transparent, you forget that you too have a responsibility in this relationship. I cannot do my job and serve your best interests if you do not take equal responsibility in this relationship.
As a professional advisor, I too expect you to act honestly, openly, respectfully and morally. I expect full disclosure from you to ensure that your benefits are paid when needed. You demand all of this from me, and it should be no surprise that I too demand it from you.
And to all the financial advisors out there, be proud of your profession and wake up in the morning knowing that you can look at yourself in the mirror with pride.
And finally, to the client to whom I am referring, I will do right by you and support you through this transition. If ever you need me, my services, access to my team or simply need a friend, I am but a phone call or email away! It has been a privilege being part of your life and your families lives these past years and I wish you nothing but good health, success and a long happy life.
Mike Lombard is a certified financial planner and Sars tax practitioner.
The views and opinions shared in this article belong to their author, cannot be construed as financial advice, and do not necessarily mirror the views and opinions of The Citizen.
Article originally published on Moneyweb