What Should Clients Expect?

How much can clients expect from you? They can expect your wisdom and guidance in developing and following a discipline. And when events create short-term stresses, they can also expect an extra dose of empathy and conviction (see Hanging Tough, Page 35). But at some point, cut yourself loose from people who act irrationally, won't listen or suck too much emotional energy. As Nick Murray tells RR

How much can clients expect from you?

They can expect your wisdom and guidance in developing and following a discipline. And when events create short-term stresses, they can also expect an extra dose of empathy and conviction (see “Hanging Tough,” Page 35).

But at some point, cut yourself loose from people who act irrationally, won't listen or suck too much emotional energy. As Nick Murray tells RR Senior Editor Michael Hayes, “I think a lot of brokers have burned themselves up trying to reason with people who are incapable of reason.”

Do Right, Do Nothing

What do you do when the market gets crappy?

Assuming you did the right thing initially, nothing. But do communicate. Level with clients about the risks they're taking. Show the probabilities, talk about the odds of achieving goals and adjust accordingly. Clients should see portfolio losses for what they are — somewhat predictable events, depending on risk levels.

This is also a good time to redefine retirement. Reps are emphasizing the need for clients to not fully retire. Supplemental income during retirement helps in tough times and avoids unhealthy fixations on the market (see “Retirement Plans in Peril?” Page 49).

A $28 Million Message

An arbitration panel in August sent a welcome message to brokers: There may be justice after all.

The case involved former Waddell & Reed rep Stephen Sawtelle, who claimed he twice told his firm to fire a broker who later embezzled client funds. Apparently, Sawtelle told the SEC about the firm's failure to supervise, and that's what got him fired (see “Rep Wins $28 Million in Employment Case,” Page 28).

The arbitrators found that Waddell & Reed then “orchestrated a campaign of deception” to discredit Sawtelle.

These cases always get nasty because a wayward firm and its management will always attack a whistle-blower or look for scapegoats. (Waddell & Reed has had several other embezzlement cases.) But thank goodness some arbitrators are willing to dispense justice for an individual who exposes compliance failures. And thank goodness for brave brokers who are willing to speak up.

Best of luck,

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