You and the insistent client 


At ValidPath, we've been thinking again about the challenges raised by (a) the insistent client, and (b) the somewhat ambiguous nature of the FCA's guidance on the subject.  We have written, in the past, about the essential ambiguity at the heart of the regulator's stance, and have sought to provide a little more clarity on a topic where, in practice, clarity appears somewhat elusive.

The FCA guidance is important, even though it feels woolly and insubstantial, because in practice it may be the only thing which helps the well-meaning Adviser when one of those insistent clients comes back for a second bite at the apple.  We have been in business for long enough to know that there is a high probability that the client who said "Yes, yes, yes, I know all of that, but..." will, years later, reappear with quite a different narrative.

The insistent client is someone who plays upon your best nature (you want to help him or her, after all) but is likely to be the conduit for a disproportionate amount of grief.  So, it really is worth thinking very seriously about the kind of circumstances where it may be reasonable to facilitate their wishes, where those wishes run contrary to your considered advice.  Such an approach is predicated upon the idea that you might not instantly rule out any circumstances where the client ignored your advice - but, for an increasing number of firms, that is becoming the default position.  You don't need to be a mathematics genius to complete the equation: Ambiguous FCA guidance + Increased FOS compensation limits = ???

So here is a kind of back-of-fag-packet outline of a way of thinking:

  1. Have I given definitive advice on 'X'?
  2. Is that advice:
    1. Wholly underpinned by a comprehensive assessment of the data?
    2. Safe, in terms of the diagnostics which feed through to it?
    3. Clear, in terms of the conclusions or actions which are anticipated?
    4. Endorsed by a third party with appropriate expertise?
  3. Is the alternative(s) to that piece of definitive advice:
    1. Unsafe? or
    2. Inconsistent with the known data? or
    3. Demonstrably inferior in terms of prognosis?
  4. Has the client agreed with my advice?
    1. YES - go no further and rejoice
    2. NO - proceed to Question 5
  5. If the client disagrees with my advice and 'insists' on an alternative, then:
    1. Is this because of a misunderstanding? - in which case go back to points (2) and (3) and explain yourself very clearly, in words of one syllable, and don't give up until the client understands;
    2. Is this because the client has his own preconceived agendas and was only paying lip-service to the idea of advice?  (DBTVs are a good example of where this may happen) - in which case, resign immediately;
    3. Is this because the client has a genuine human need, a significant priority which might possibly override other considerations? (eg. serious, life-threatening conditions in conjunction with pension access) - in which case, you might well find a way to work with the client, especially if you are able to involve other family members in the planning process;
    4. Is this because you (the Adviser) missed some point of significance earlier in the advice process - in which case, apologise profusely, redo your work and see how it all pans out.
ValidPath's view is that your role is to advise, and not to be an order-taker.  This means, in practice, that there should be a clear, linear correlation between the advice and any resulting transaction.  The moment some kind of discontinuity appears between these two stages, is the moment when all the klaxons should go off - what we call, betraying our age, the "Danger, Will Robinson!" moment.

Kevin Moss, 08/08/2019