In our hyper-fast world, financial advisors, like many in the service sector, have become lazy. Let me be clear, I think financial advisors are working harder than ever to service their clients in these challenging times for which they should be commended.
The laziness to which I refer is that I see financial advisors taking too many shortcuts in the race to secure clients and open accounts. In particular, financial advisors have all too often taken the easy way out when it comes to account and investment opening forms.
For example, I have seen incomplete accredited investor questionnaires and account opening documents that do not have the tolerance for risk or investment objectives completed. By failing to take the time to complete these forms, you expose yourself to unnecessary risk.
One of my partners tells a story about a line his high school football coach used to say when a player questioned being criticized; the coach would always respond, “The film don’t lie.” Similarly, account/investment opening documents do not lie.
When I defend financial advisors, the very first thing I look for are these documents. Completed documents, signed by the client are a sure fire step in the right direction when it comes to formulating the defense.
Although there are times when the completed forms do not match reality, having completed forms, signed by the client, make your defense much easier. In other words, having these forms places the burden on the complaining investor to overcome the presumption that the forms (and the investments) were consistent with the client’s desires expressed in those completed documents.
The converse is also true. Incomplete forms may give rise to a presumption that the financial advisor was not looking out for his clients’ best interests. Don’t be one of those advisors. Take your time and protect yourself; make sure all forms are completed and signed by your clients.
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