I thought I would share a quick story today. Years ago I had sat down with a prospective client after having put on a seminar for a small group of investors. The investor and I had gone through the regular first steps of putting together a financial plan: we explored and defined his goals, got all the details of his current situation and I was about to leave to do the number crunching when he walked me to my car after the meeting only to make a confession. He hadn’t told me of one other goal of his: he had a secret love child who was almost 20 years old and he wanted to make sure that he received an inheritance, but didn’t ever want his wife to find out. At first I thought he was joking, but he was serious.
He didn’t become a client in the end, but I had discussed he should look into setting up a life insurance policy as the death benefit would pass outside probate and not become a matter of public record (unlike the stuff that does go through probate).
You certainly see a lot of the same situations when working as a financial advisor, but I’m sure all financial advisors have a few stories that catch them off guard.
I love it! (this is my favourite picture on your site too).
What would your ethic stance be if you were doing financial planning for a couple and one of them came with a request to do this in secret from the other partner?
I guess that should be ethical…
@Cheap: I think if I were to ever walk into a situation like that, in an ideal world I would provide the information to the person in confidence for them to do with as they please and then not take them on as clients. I could not deal in a fully honest way with the other spouse if one had a such a big secret to hide from the other, and that’s not acceptable to me.
Hard to act in the best of two clients when those interests are diametrically opposed. When you take care of a couple, you actually have two clients. If you can’t either get them on the same page or at a minimum disconnect the conflict between them so one’s interests do not harm the other’s, there is no way you can serve them both properly. Inevitably you would eventually be forced to do something unethical.