“Kimberly, I can’t sleep at night. I’d really appreciate it if you’d just take a look at my portfolio and honestly tell me what you think.”
It was early April and the caller was a small business owner whose marriage had recently ended. That, along with the problems the coronavirus pandemic was causing for her business and her investments, would make anyone extra-stressed.
The problem was, she wasn’t my client.
About a year earlier, I had presented my advisory services to her and she went with another advisor. Now, she wanted me to give her a second opinion on the portfolio my peer had constructed for her.
Still, I agreed to Zoom with her, if only, I thought, to calm her down a little.
Now, I have no problem whatsoever calling it the way it is when a broker or advisor hasn’t done the right thing for a client. In fact,
But this wasn’t such a case. I knew the other advisor — like me, an independent, fiduciary, fee-only, certified planner — and I knew the product providers he worked with — the same ones I do. While I had been surprised when, after seemingly liking everything I said in my presentation, she had decided to work with my colleague instead, I had no real concerns about how her investments would be handled.
Yet, as I looked at her account statement in preparation for the meeting, I recognized that my colleague had created a somewhat more aggressive asset allocation than I would have recommended for someone of the client’s age. Nothing truly egregious, but shaded a bit more toward equities than I had advised in my presentation. But the assets in her portfolio were all high-quality holdings. So, I decided to ask some questions.
Up, up, up
As we talked, it came out that my colleague had originally recommended a portfolio allocated along the more conservative lines I had recommended.
“But the markets were just going up, and up and up,” she said, “and I felt that I should have been seeing more growth.”
In other words, she had leaned on her advisor, voicing enough concerns about the lack of return in her portfolio that he reluctantly reallocated her portfolio more toward equities.
And that was great in 2019 and for the first six weeks of 2020. But then, then COVID-19 descended upon us, and we all know what happened next! When the bottom fell out and her portfolio started taking hits, she contracted a classic case of buyer’s remorse.
“So, have you spoken with your advisor about how you’re feeling?” I asked her. The look on her face told me all I needed to know. “Well, here’s the thing,” I said, “you owe it to your advisor to be honest about how this is affecting you, and you probably need to revisit your asset allocation.” I stopped short of saying “I told you so,” but I was thinking it loud enough that she probably heard it, anyway, even on Zoom.
By the end of the meeting, she agreed to make an appointment with my colleague and talk things through. As we were getting ready to end the meeting, she looked at me and said, “Kimberly, I can’t thank you enough. You’ve always been there for me, and I am so grateful.”
That little voice
At that moment, half of my brain was yelling, “Well, then why didn’t I get the account!?” But the other half was feeling a rush of an emotion that I can only describe as gratitude.
Why was I grateful? Because I knew how easy it would have been to poach this client in her moment of anxiety and weakness. I had stared that temptation in the face and defeated it. The feeling of having done the right thing for the client and for my professional colleague was so much more gratifying than getting her assets under management for my firm.
There will be many more chances to gain new clients and grow my firm; there may not be many more opportunities to savor that feeling: Realizing you could have made the easy choice, but knowing you made the right one.
Another takeaway and a word of advice to all my colleagues: Our clients depend on us to make the calls they can’t make for themselves. In this case, my colleague could have better served his client by reminding her of why he had designed a well-diversified, conservative portfolio in the first place. By letting her chase the siren song of the big payoff, he set the stage for her to call me for a second opinion.
My final takeaway is this: We all deserve a second chance. We’ve all been in the position of having a client demand a course of action that we believe is incorrect and we’ve all struggled with how to stand our ground without losing the client. That is also why it felt so good — so right — to encourage this client to go back and talk to her advisor.
By giving him the benefit of the doubt and communicating honestly, she was also helping herself by ensuring better advice and service from him in the future.
That’s the kind of win-win we all need.
