What should you do when a client wants to go against your better judgement? Thankfully, it doesn’t happen too often, but so-called ‘insistent clients’ can be a challenge for advisers.
In these circumstances, it is crucial you know your rights – and that includes the right to say no. You don’t have to act for a client if it makes you uncomfortable.
Guidance on dealing with insistent clients is available in the FCA’s handbook, but it is important to understand your regulatory requirements, the risks posed and how to mitigate future complaints.
Don’t shy away from the negative outcomes associated with the client’s proposed action
So, you’ve outlined your professional advice and the client has rejected it, preferring a different course of action. You now face a choice: do what is asked of you or politely decline, which may end your working relationship.
Deciding to act for the client exposes you to several risks. They are:
- Regulatory scrutiny if the transaction goes wrong
- Reputational damage should a complaint be lodged against you. Not to mention the time and cost of dealing with it.
- Potential liability if financial harm arises
What do you do? This will depend on how insistent the client is, but being proactive is a must. It could simply involve ensuring your compliance systems and staff training are up to date, so you are best placed to manage the situation.
Yes, we all want happy clients, but your integrity is important too
Politely express your thoughts and concerns, ensuring your tone is respectful, clear and direct. Don’t shy away from reiterating the negative outcomes associated with the client’s proposed action. This will help them appreciate the gravity of their decision.
Remain firm in your position
Yes, we all want happy clients, but your integrity is important too. Conceding to requests that won’t result in good outcomes is not the way to foster a healthy long-term relationship.
It is important to remain resolute in your professional opinions – you were hired for a reason. Your advice is valuable and sometimes that means resisting a client’s insistence.
Remember, good advice is often tough
It might be difficult but saying ‘no’ can be the most professional thing you can do and it might just be what saves your client from a detrimental decision. Your courage to maintain standards in the face of pressure will reflect positively on your practice and, in the long run, enhance your reputation.
It can be tempting to cave in to save your relationship but, remember, good advice is often tough. It is essential to reiterate your position, yet ensure the client feels heard and respected. With the right approach, you can manage the situation effectively while protecting your professional standing and the client’s interests.
Your regulatory requirements
The FCA is clear on the matter of insistent clients, placing the emphasis on providing appropriate advice, communicating transparently and maintaining detailed records.
The regulations require you to give suitable advice, tailored to the client’s needs, circumstances and risk tolerance. This means you must assess the suitability of the action they are determined to take, even if it goes against your recommendations.
We cannot emphasise enough the importance of documenting all interactions with the client
You must explain clearly why the client’s proposals are unsuitable, detailing the potential implications and risks. This dialogue should aid their decision-making process and it reinforces your commitment to their welfare.
We cannot emphasise enough the importance of documenting all your interactions with the client, including your communications, the advice offered and rationale behind the decision that has been taken to act against your advice. These records will be critical evidence if a dispute arises.
Mitigating complaints
The prospect of receiving a complaint is a significant concern if you are faced with an insistent client. Dealing with the situation effectively requires emotional intelligence and patience.
It may also be useful to seek the second opinion of a colleague or your compliance support
Having robust processes in place should help you defend your position, as will the meticulous documentation described above. Make sure you obtain written acknowledgement confirming the client understands the associated risks if you carry out their wishes. This acts as a form of consent, potentially protecting you from future complaints.
It may also be useful to seek the second opinion of a colleague or your compliance support before proceeding with the transaction. This additional layer of review can provide assurances about the suitability of your advice and further bolsters your case, should a complaint arise.
Remember, it is the client’s decision in the end
Balancing a client’s autonomy with your duty to act in their best interests can be a huge challenge when the advice you have provided is rejected. But, with careful handling, robust processes and the right support, these complex situations can become an opportunity to showcase your commitment to the client’s welfare and upholding professional standards.
Remember, it is the client’s decision in the end. Your role is to provide professional advice and clear recommendations. If they choose to go against this, it doesn’t reflect poorly on you, but it does place the onus on you to manage the situation cautiously.
Vicky Pearce is a director at B-Compliant
