You did it, you spent thousands of dollars on marketing, you went to a hundred different mixers, you went to many golf tournaments and finally landed your biggest client. It started off as a few small things you did for them such as re-writing a will and looking over existing trusts but eventually grew into some of the best and most rewarding work you have ever done. They are reasonable when it comes to any legal fees you collect for your services, they value your work and see the time and energy you put into your personal relationship. You value the personal relationship too and have tried your best to show how much you appreciate your client. You know their family and they know your family, you’ve even taken a trip together. Your client tells you things that their family probably doesn’t even know.
Then it happens.
They start to miss important meetings with you that they had always been early for and happy to take. They start bouncing checks that are meant for their legal bills. You show up at meetings and your client doesn’t seem to remember why you are meeting. Their children start to accompany them to the meeting and ask for details that you aren’t sure your client would be comfortable sharing.
You feel that you are starting to lose your client.
Your Role in Financial Protection
It is a fact of life that people change over time. Unfortunately for your professional relationship, your client’s trust and relationship are built on the premise that they are lucid and in control of their faculties. In fact, it is that good and sound judgment that led them to work with you in the first place.
So what have you done that has helped your client to maintain that relationship if they are no longer in full control of that same sound judgment? If you haven’t already begun the process, it may be time to contemplate a day when your client will no longer just be the one writing the checks and dictating the terms of how you do business. If you have begun some contemplation, now may be the time to start taking meaningful action.
As John D. Rockefeller said, “A friendship founded on business is better than a business founded on friendship.”
In fact, you owe it to your clients to consider the possibility that despite your great friendship, greater hurdles are ahead that requires planning and consideration. Immediate and proper planning is important because your client’s decision-making abilities about their assets are best when they are lucid and fully in control. By the time their faculties begin to the fade, the losses could be staggering, the recovery costs great.
Bringing in a Third Party
Sarah Purifoy, a forensic accountant, shares “having someone review accounts on a regular basis could limit the losses as it is hard to get money back because the stolen money is often spent.” This could mean that your client won’t ever see a dime even if you can prove that the client had been defrauded.
If we consider that according to the National Center for Victims of Crime reports that people who are age 65+ are 34% more likely to lose money to financial fraud than people in their 40s the call to action is greater than ever. How can you afford not to begin protecting your clients right away?
One way, Sarah suggests is that “An independent third party could help oversee the funds.”
Trust Management Company
An example of a third party may be a large trust management company to help manage all financial transactions for your client. According to Investopedia, a Trust Company is a separate corporate entity owned by a bank or other financial institution, law firm, or independent partnership. Its function is to manage trusts, trust funds, and estates for individuals, businesses, and other entities.
Trust management companies get their title from the fact that they act in a fiduciary capacity for their clients – as trustees. The majority of a trust company’s assets are held in actual trusts, with the trust management company named as the trustee. Trust companies generally employ several types of financial professionals, including financial planners, attorneys, portfolio managers, CPAs, and other tax professionals, trust officers, real estate experts, and administrative personnel.
By spending money for these larger companies that fully manages your client’s finances, you could protect them from some of the tricky fraud that could be perpetrated on your client. Unfortunately for many victims of financial crime, the crime usually starts with small dollar amounts and quickly snowballs into large total losses.
Assemble a Financial Team
Another way to potentially cut the costs of hiring larger financial management companies but still protect the client may be to bring together a team of professionals to work together to protect a client. By having a CPA, attorney, and financial planning team work together, they can often get a holistic picture of the client and feel out where there may be some signs of trouble forming around the client’s faculties and assets.
Trey Wilkinson, President, and CEO at Trinity Legacy Partners, LLC, notes that “Most successful business owners and entrepreneurs know what they are good at and hire people to fill in their gap.”
“The more clients are exposed to things, the better decisions they make,” he adds. “It’s my job to ask questions and if the client has not thought of the answer to help them get to those answers.”
As your clients age, it is important to begin to ask yourself: How well do you know the client’s family and the family’s other advisors? Are you the only person who helps your client make important decisions or are there other people who your client wants involved in the decision-making process? It is time to begin piecing together this dialogue now as opposed to potentially never?