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Own It: How Advisors Turn Gaffes Into Good Fortune

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Professions such as financial planning and medicine are highly paid because of the responsibility involved. It is a privilege and a tremendous responsibility to assist people with these vital facets of their life. As a CFP and an M.D., I have distinct insights, and can tell you that, in both professions, mistakes occur, even with the most conscientious practitioners.

What can set you apart from the crowd? How you deal with mistakes when they occur.

Because our planning clients pay us well, we are expected to know a lot, and clients expect mistakes to be minimal; they also expect to be made whole when one occurs. Most mistakes are minor and easily fixed, while larger mishaps are the reason we should never go without errors and omission insurance coverage. How can advisors minimize mistakes as well as the fallout when one happens? There are a number of steps to take.


In medicine, studies have shown that doctors with great bedside manner incur fewer lawsuits. Basically, if someone likes you personally, they are less likely to sue you. Arrogance and condescending attitudes are quickly recalled when an outcome is not as expected. Advisors who attract clients through braggadocio quickly pay the price when they cannot deliver. The first step in staying out of trouble is to remain humble, admit when you are uncertain, and communicate clearly to a client what you can and cannot do for them.

The next step is to have clear and consistent processes in how you do your work. Checklists, task management systems and good documentation are great tools to minimize holes in the delivery of your services. Meeting summaries and completing promised tasks go a long way in instilling client confidence and delivering service a client expects.

What do you do when a mistake occurs? No matter how small or big the mistake, you must own it. Most mistakes are not the fault of a person, they are the fault of a failed process. If you are in charge, this failed process makes it your responsibility, even if an employee three steps down the hierarchy pulled the trigger.


Review the actions that led to the mistake. Most failures fall in the realm of communication, documentation, lack of training, overconfidence or lack of attention to detail.

Errors of communication can be mitigated through paraphrasing a request. When asked to do a task, repeat the task to the person making the request. Likewise, when requesting an activity, ask the person to whom you have relayed the request to share back what you have asked them to do. This may seem condescending, and you can preface your request by saying, "I want to make certain I am doing a good job communicating what I need from you. Can you summarize what I asked you to do?"

Good documentation needs to be a culture standard that permeates throughout the organization. If it isn't documented, it didn't get done. In our firm, we put all requests in SalesForce, and tasks must be updated routinely.

Lack of training is a setup for mistakes. Ascertain that a colleague completing a task has received appropriate instruction and is given an opportunity to ask for help. Occasionally, we throw our interns into the deep end of the pool to let them stretch their skills. We give them permission to fail in advance and stress that their work is not for client consumption until it is reviewed by an experienced member of the firm.


Overconfidence is a challenge. It must be stressed that guesses must be articulated as such, and not being forthright with a client is not tolerated. In our firm, this is a cause for automatic dismissal. If you don't know something for certain, say, “I don't know.” Or, “I don't know, but I'll find out."

Once the cause of a mistake has been identified, put processes in place to reduce the chance a similar error will occur. Share a mistake with the entire staff in a positive way. Our firm labels mistakes as an "opportunity to do something better."

If we notice a mistake before a client does, we tell the client we made a mistake, how it happened and what we will do to keep the same error from happening in the future. In addition, we tell them what we will do to make them whole. Thankfully, the mistakes we've made have been small and most did not involve any monetary restitution. It might sound unachievable, but we strive to make a client delighted that a mistake was made because they usually come out better when we are done with our apology.


Even if a client seems to have some responsibility for the mistake, own it for them. For example, if a client is supposed to make a deposit by a certain time but fails to do it, consider saying that maybe you didn't communicate the urgency. Ask for input on how to handle these matters in the future. Putting a client on the defensive can cause great harm to the relationship; they will talk about this unpleasant experience to others. Taking them off the hotspot can cement a better working relationship.

By going above and beyond the call of duty, and by authentically owning our errors, we have cultivated a group of loyal clients who know we look out for their best interests. And because of (not despite) the occasional error, they refer people our way.


Carolyn McClanahan, a CFP and M.D., is a Financial Planning contributing writer and director of financial planning at Life Planning Partners in Jacksonville, Fla.

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