Given Rory Percival’s three steps to dealing with insistent clients, would you still ‘Just say no’?
Emma Napier, head of distribution, True Potential Investments
With good old-fashioned face-to-face advice, there are always instances when a client disagrees with their financial adviser. From time to time, these clients can become insistent, despite the adviser’s better judgment.
In my view, this can and should be managed by the adviser as part of the overall relationship. It is not simply a case of “computer says no.” Advice is a profession and while clients want advice, they don’t always act on it. That doesn’t mean the relationship is broken.
There are three steps for how I would deal with an insistent client. Step 1: Nothing new. Advise in a concise manner, with emphasis on making it easy for the client to understand why and what action is being recommended (neat, short suitability letters aligning to the goal objective). Step 2: If the client has questions, or an alternative opinion, the adviser’s professional competency naturally spells out how the recommendation meets the client’s objective (the why) and, at the same time, pinpoints the risks involved in the alternative approach (the why not). The key here is to back this up – summarise and document the conversation – it takes two minutes. Step 3: Clear documentation is crucial.
As an industry, financial advice has evolved considerably as a result of technology (for example, platforms) and now front and back office adviser technology integrated for clients to self-serve some of the journey, such as goal setting and lifestyle forecasting. Clients can elect to ‘do it themselves’, removing the regulatory onus on the adviser if they wish, but keeping the adviser relationship intact.
Lee Tomkins, managing director of Blackdown Financial
I can completely see where Rory Percival is coming from when he outlines his three steps for dealing with insistent clients, but it is just the regulator’s perspective today.
The issue as I see it is that, as an industry, we have previously had events such as these. The drive to ‘break free of your company pension scheme’ in the 1980s comes to mind. Then the regulator applied retrospective rules and procedures which resulted in many pursuals against advisers.
Any adviser that has been in this industry for a while will know similar examples and be wiser by past experience.
However the issue is more about the clients wishing to access their pension pots without engaging in an advice process – they want what the government promised – pension freedom.
If the client does not want advice but just wants to action a pension withdrawal then undoubtedly we, as a firm, will walk away from that client and refuse to deal with them.
If they decide to engage in the advice process and we allow them to, then this process would go beyond what Rory is indicating is needed. If done properly it should protect the adviser from any backlash in the future. But the past has proved that despite all the procedures and paperwork being done within the rules of the day, with the benefit of hindsight and new rules, the regulator has seen fit to punish the adviser community retrospectively.