The Fraud Squad

Q: Two years ago, I made a serious error in judgment that cost me the account of a high-net-worth client. I’ve apologized several times, but the client believes I deliberately made a wrong decision out of self-interest. I have always tried to maintain my integrity, and am ashamed to think he considers me to be dishonest. Even if there’s no hope of winning back his business, what can I do (if anything) to restore my good name with him?

A: Since some time has elapsed, you might write to this former client explaining how deeply it continues to bother you that your mistake harmed him, and asking if there is anything you can do to make amends. Assure him that your purpose in writing is to help him understand that you were in no way motivated by personal interest.

Although you may not receive a response to this letter, it could still have an impact. Another way to help this man perceive you in a better light would be to undertake a pro bono project in some social, religious, or civic arena where the two of you cross paths.

Good luck in winning back your ex-client’s respect. But whether or not you succeed, try to forgive yourself for your past mistakes, and move on to serve your current and future clients with conscientiousness and care.

Q: My office is next to that of a planner who’s been in the business since 1980, and sometimes I can’t help overhearing him on the phone. The other day he barked to one of our firm’s retiree clients, “Get over it. Trust me, the market will come back.” I agree with his confidence, but brushing off questions with “Trust me,” makes us sound like scammers in a boiler room. How can I tactfully suggest that a little TLC might help a nervous client trust us more?

A: Your colleague reminds me of a grizzled old warrior who has survived so many firefights that he can’t remember what it’s like to be scared. I think it would be helpful to make him more aware of the view from where the client stands, so he can build a bridge from there to where he himself sits with all his years of experience.

This might start with an informal chat (perhaps over lunch or coffee) where you ask him how he’s feeling about his clients these days–especially the ones who are freaking out about a bear market. If he complains about their anxiety, their ignorance of previous recoveries, and their irritating demands for some kind of action, try to listen compassionately. You might then offer an anecdote about someone (possibly yourself) who became too burned out to respond to clients with the necessary patience and empathy. Tell him that clients reacted to this unsympathetic attitude with resentment and distrust, as if suspecting that they were being sold a bill of goods.

You might even ask your colleague if he has any fear that the market won’t turn around this time. His curt “Get over it!” could be a defense against his own anxieties. I hope you can get him to understand and soften his attitude a bit–for his clients’ sake, and for your firm’s as well.

Q: A longtime client of mine is worried about his mother, the widow of a career Army officer. Ever since she contributed to an organization purporting to help military veterans, she’s been bombarded by phone solicitations from questionable charities. My client tells me that she has always tended to give to others instead of looking after herself, and finds it hard to say no to anyone who needs help. He wants to know how to protect her, but is reluctant to hurt her pride. How should I handle this?

A: If she doesn’t live too far away, invite her to get together with you and your client to discuss his concerns about her financial well-being. In this conference, I would explore how secure she feels about her money. If she voices any fear of seeing it dwindle or losing it to scammers, you can coach her about common types of consumer fraud (see the AARP link I mentioned earlier), especially in the area of charitable giving. Then brainstorm with her and her son about ways she can protect herself, without giving up the freedom to donate to causes she knows are trustworthy.

A fairly simple solution would be to get Caller ID and let an answering machine pick up calls from any sources she doesn’t recognize. (You might position this as a way that generous souls like her can avoid putting themselves in the awkward position of having to say no.) Signing up with the federal Do Not Call registry won’t stop solicitations from registered charities, but she could insist that each unwanted organization put her on their own Do Not Call list. A third option would be to clear all potential donations through her son, your client. This would give her a polite “out” with solicitors (“I have to talk to my son first”), but having to ask for his approval might feel too humiliating to her.

Helping people learn to guard themselves from rip-offs is an exceptionally hard and frustrating task. Ideally, you’ll be part of a team of trusted family members and experts who can help educate these folks while working to defend their financial and emotional interests. If older people are increasingly targeted by crooks–whether by phone, on the Internet, or door-to-door–we can expect to see more regulations (and hopefully more prosecutions) to protect against fraud. In the meantime, it may be up to you to educate, support, and protect clients and their parents who happen to be “where the money is.”

Olivia Mellan, a speaker, coach, and business consultant, is the author with Sherry Christie of The Advisor’s Guide to Money Psychology, available through the Investment Advisor Bookstore at www.investmentadvisor.com. She also offers money psychology teleclasses for financial advisors and for the general public. E-mail Olivia at [email protected].