Most Read Contributor in United States, November 2016
In the hectic world of financial services, registered
representatives and investment adviser representatives are always
looking to increase their assets under management. At what cost?
Are there situations where you would be better off just saying no
to accepting that one additional client?
In my many years of defending representatives and advisers from
customer complaints, the unqualified answer is yes; there are
situations when you are better off just saying no. Any good risk
avoidance program will provide for the proper screening/selection
of prospective clients. I have addressed this very issue in a risk
The key to this screening process is being able to sniff out the
types of clients that you do not want to accept. For example, are
you the fourth adviser that this client has come to in the last
four years? Does the client profile not fit your personal/company
investment philosophy? Does the client have unrealistic
expectations on what she is expecting you to deliver?
If the answer to any of these questions is in the affirmative,
there should be a huge stoplight in front of you flashing red. Any
client who fits any of these descriptions is also the client most
likely to bring a claim against an adviser.
So before you take on any client with a little money, be
cautious. Are there red flags coming into the relationship? If so,
just say no.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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