In the professional world, people have many different business relationships. Some relationships are developed through business ventures or partnerships while others are established because of legal requirements. For instance, businessmen and women most often are required to hire attorneys and accountants because of legal issues that arise during the normal course of business.
These are the relationships that this article is mainly focused on. Professional relationships between a client and a professional like a financial advisor, accountant, or CPA all have very different climates and unspoken agreements in place that other relationships do not.
In general, the financial advisor is most often acting as a fiduciary for his client. This means that it is the responsibility of the advisor to ethically and professionally handle the client’s money in their accounts as well as invest it properly or gives intelligent advice. Financial planners have to follow professional accounting standards in order to continue to practice.
As some of you may have experienced in your life, this isn’t always the case. Some financial planners and advisors are careless with client funds and invest them poorly costing the client hundreds, thousands, or even tens of thousands of dollars. Obviously, this is a difficult situation for you as the client. You must confront your financial advisor and settle the problem.
In many cases, clients get into fights and yell to prove their point during and argument about finances, but this isn’t the proper way to mediate a problem with your accountant. For example, assume your advisor had half of your funds invested in mutual funds with a lower than average formula to calculate contribution margin units. Because of this fact your investment has continually decreased in value since it was made.
Before you go off the deep end and start yelling at your planner, take a deep breath and plan out a meeting. This is the most productive way to communicate your points. Keep in mind that he is a professional. There might be a reason why your money was invested in this way. Let him explain his investment strategy before you allow a confrontation to start.
This is the best course of action. For instance, a good reason why your accountant may have invested your money in these mutual funds is because the funds had a higher turnover on inventory than other accounts. By turning the inventory faster the company was able to make up for the fact that the debt equity rate wasn’t the highest in the investment pool.
Just try to remember that your professional staff is there to help you. Unless you suspect them of fraud or general wrong doings, it’s always more beneficial to confront problems with organized and planned meetings rather than trying to fight and argue your point across. It is in both you and your advisors’ best interest to have a communicative relationship that will allow both of you to succeed. Try these strategies out next time you have a conflict and I guarantee that your resolution will be smoother.