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The following story doesn’t happen very often around here, but, this one really hurt.  We lost a client of 23 years – one whom we had been through a death of the spouse and a major move to the west coast.  This was a person whom we all cherished and we were so diligent to provide top notch comprehensive wealth management services.  We developed a financial plan and reviewed it often.  We worked around a number of legacy investment holdings that would have had a major tax impact had we sold.  We made sure that new investments were located in the correct accounts – higher dividend payers in the IRA and qualified dividends in the non-retirement account to get special tax treatment.  We understood everything that was going on in the clients life and who received a great deal of value and attention from our staff.  So what happened?

We think it was a combination of being upset about a particular investment, a miscalculation on her part about performance (after all, we achieved the benchmark returns!), and as much as I hate to say it, we think her age made her susceptible to shark infested waters.  She likely started discussing some of these hot button topics with the “advisor” at the bank and he pounced on her words, whether accurate or not.  Our 85 year old client is now starting from scratch with an “advisor” who is likely selling her a bill of goods – products that probably are paying him some handsome commissions.  She revealed her vulnerability and they took advantage of her and there is nothing, we as fiduciaries, can do to stop it from happening.

But, maybe you can learn from our clients mistakes.  Be careful out there.  If you are elderly, make sure you have a child or other trustworthy people accompany you to meetings.  Make sure you understand what you have and the motivations of those who claim they are going to make things all better.  Make sure you are knowledgeable before you jump into shark infested waters.  It could really hurt.

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