Against advice
title: Client Wants to Act Against Your Advice description: [AFW S.12.2.31] Client Issues published: true date: 2026-06-30T08:08:46.088Z tags: editor: markdown dateCreated: 2021-05-11T18:03:01.269Z
"Letting a client invest in what he wants instead of what he needs, and thereby setting him up (in all probability) to fail financially, is impermissible regardless of how happy it will make your compliance department, or even the client." -Nick Murray
Read Nick's ATY 075 March 16 - Disserve a Client PDF
Read Nick's ATY 263 September 20 - Start By Taking Yourself Out of the Running PDF
Read Nick's ATY 294 October 21 - Incoming Missiles PDF
Read Nick's ATY 295 October 22 - When They Want to Go to Cash PDF
What do we do when the client/prospect wants us to help him do other items on the whole menu of wrong things—things that are alien to our philosophy, and that we believe will lead him down the dark road to substandard (if not negative) returns? What if he insists?
How do we diplomatically but firmly decline to help (or just passively enable) clients, when they want to do any and every other wrong thing with money of which we are the presumed stewards?
If the client wants you to recommend a product or strategy that you disagree with... taking money from people in exchange for enabling them to do things that you know are wrong is immoral, and how do you look at yourself in the mirror and all your doing is postponing the inevitable. If you're helping people do the bad things they want to do that's going to be a train wreck. And they'll turn around and blame you. If the only alternative is losing the account, they so be it.
Script 1 - You're Doing it Wrong¶
Prospect: I would like to invest in stocks, bonds, CDs, not use variable annuities or mutual funds, and move my money around based upon what I hear on CNBC.
Advisor The first step is to make your calmest, quietest, but most forceful and cogent short statement as to why you firmly believe the direction he proposes to take is the wrong one for him.
I believe the finest course of action is for you to invest in a long-term, well diversified mutual fund (and leave it alone), until you're close to retirement. Then, move the funds into a variable annuity in order to provide consistent withdrawals through retirement.
Prospect: No, I want to do blah, blah, blah.
Advisor So that didn't work. Then the second step is the moment of truth. I suggest that you just gently and empathetically say: I’m sorry, but I just wouldn’t be able to help you do that. Then go silent. Do not amplify that statement—it requires no defense or explanation—but wait to hear what he says next, because that will tell you where the conversation is going to end up.
Prospect: That’s certainly your good right, and I’ll help in every way I can. (Silence)
Advisor Alternatively, if your prospect asks for more information or is open to hearing what you mean...
All my professional education and experience tells me that the advice I just gave you will produce better results for you and your family in the long run. If I know that, but I enable you to do something I deeply feel will end up being harmful to you, in my values system I’ve taken on some part of the responsibility for that harm. And I simply won’t take that responsibility, much less allow myself to be paid for taking it.
Look: I sincerely hope we do business until one of us passes. If I go first, that’s that. But if you do, I’m going to have to sit with your family, and go over our accounts. If the outcome of what you want to do is negative, as I think it will most probably be, I’ll have to explain to them that you acted against my advice. At that point they’ll almost certainly ask me why I couldn’t have persuaded you not to do it. I won’t ever have a good answer to that, so I’m never going to put myself in that position.
I’m sure there are other advisors who would gladly help you do this, and of course you can always do it online. But I have to stand on my statement: I’m sorry, but I just wouldn’t be able to help you do that.
Then let the chips fall where they may. You won’t have become confrontational; you won’t have argued; you won’t have worn yourself out trying to "prove" something when you know you can’t prove that the sun’s coming up tomorrow. You’ll have abided by your (may I say "our"?) principles—and best of all, you’ll have beaten back your fear that if you lose him, you won’t be able to replace him.
Script - They Go Elsewhere¶
If you help a client but they end up not taking your suggestion and going to another firm/Advisor, you can say....
Advisor Well, if you do that then they get paid instead of me; but they didn't do any of the work - I did.
Read Nick's ATY 131 May 11 - When They Get Out Anyway PDF
Watch Client Wants to Act Against Your Advice VIDEO