At Lee Financial in Dallas, advisor Dusty Wallace says she and the other advisors in her shop answer clients’ family member's questions: “When we are not telling them anything more than they already know.”
For example, clients’ adult children may ask when (not if) their parents have scheduled a meeting with an attorney to draft a will. The caller already knows the meeting is scheduled, confirming the time is not going to ruffle any feathers. Or an adult child may say, “I heard Mom was about to buy a new car.” An advisor’s affirmation, in that case, is unlikely to cross any confidentiality lines, says Wallace.
'NO HARD AND FAST RULES'
But other times answering a family member’s seemingly casual questions may breach an advisor’s obligation to maintain privacy and confidentiality for their clients. With these circumstances, an advisor needs “to be very careful” and “use their own judgment,” since “there are no hard and fast rules,” Wallace says.
When the inquiring family member pushes too far and asks about account balances or specific purchasing plans, Wallace gently and diplomatically explains to the questioner that she will “have a conversation” with her client to see if they want that information released. “That way when we are going to the client, it doesn’t seem like we are gossiping or going behind someone’s back,” Wallace says. Being upfront about confidentiality requirements means no ill-will follows in the wake of an advisor taking appropriate action to protect a clients’ privacy even from relatives.
Sheryl Rowling of Rowling & Associates in San Diego, Calif., agrees advisors must firmly refuse to answer the questions of all unauthorized persons. “I tell them everything that happened is between the client and me and it is confidential. Unless I am authorized in writing by the client I cannot answer their questions,” Rowling says about her conversations with relatives of clients.
But Rowling also tells the questioners that she uses the same careful discretion with information they provide her. “They don’t like hearing that they can’t have the information but they don’t get mad,” when they understand her professional obligations, Rowling says.
Her resolve has faced severe tests, including when her own nieces and nephews have asked her about her aunt and uncle’s assets, which Rowling manages. “I had to keep repeating, ‘I can’t tell you anything unless they give me written permission,’” Rowling recalls.
Advisors should always “be on their guard,” she says, that answers to casual questions posed by clients’ relatives don’t lead to breaches of confidentiality.
Miriam Rozen, a Financial Planning contributing writer, is a staff reporter at Texas Lawyer in Dallas.