What would you do if a long-standing client walked through the door and demanded to cash in every single one of their investments right there and then?
This is exactly what happened to one adviser at Dennehy Weller. The client demanded that he wanted to take back every penny of the £800,000 the adviser had so diligently invested.
I have only heard this story from the client’s side, but as far as his tale goes, the adviser was initially horrified, tried to rationally explain why this was not a good idea, and then begged him not to do anything rash.
The adviser demanded an explanation, but all the client would say was that it was his money, he was entitled to it, and needed it back. The adviser’s final bargaining chip was that cashing in every investment would leave a whopping capital gains tax bill – but even that did not seem to hold much water.
The client stormed out demanding his money back.
So, what had prompted such an uncharacteristically hot-headed response from someone who had spent their whole life being prudent? Fraud.
The client had been the victim of scammers, who had managed to convince him that they were first representing his bank and then the Financial Conduct Authority.
So clever and devious was the impersonation that the victim had been lured in to thinking that his financial adviser was part of a criminal gang that was going to take his life savings.
So effective was the deception, that he really did think that his loyal and trusted adviser was now a criminal mastermind.
I tweeted about this story and one adviser got back to me and said he was concerned, not by the actions of the client, but that any adviser would have such a bad relationship with a customer that they could ever believe that their adviser was crooked.
It is a side of the story I had not considered. Great advice is, of course, built on great relationships.
You cannot properly understand the expectations and aspirations of someone without fully grasping their personal life. It is the kind of thing that no factfind can ever possibly highlight.
I see the argument. But what it fails to recognise is the sheer complexity and deceptiveness of scams these days; they are sophisticated mind tricks.
A great relationship with a client is a perfect way to combat this, but it is not the perfect defence.
What this case does highlight is how advisers now not only have a big role to play in keeping people safe from fraud, but also they could soon be on the frontline themselves.
They are, after all, the guardians of hundreds of thousands of pounds.
Scammers have already targeted estate agents and lawyers, and the banks’ own systems are slowly getting up to speed.