Lessons from a $1 Million Misunderstanding
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A recent conversation drove home how easy it is to cross wires when communicating with existing and prospective clients.
That conversation was with a good friend, a successful Toronto lawyer in his 60s who I've known for over 30 years. He has been managing his own money for the last while but markets over the past couple of years persuaded him he should look at working with a financial advisor.
He mentioned that he had sat down with one advisor (as it happens, someone I know quite well) for ninety minutes, had enjoyed their conversation and was leaning towards working with him.
In fact, he had agreed to a follow-up meeting the next week to talk about a specific plan.
This all fell apart at the very end of the meeting, as he became concerned about this advisor's strong emphasis on stocks of small mining companies ("Moose Pasture Mines" was how my friend described these stocks) that he saw as being too risky for someone in his sixties.
As a result, he had decided not to move forward with this advisor and had cancelled the follow-up meeting.
How this went wrong
Knowing the advisor, this didn't sound right. I called him, mentioned I knew the prospective client he'd talked to – and asked for his take on the conversation.
It turns out that he had thought the meeting went well and was baffled by my friend’s decision to cancel the follow up meeting.
In talking further, he said that he’d made an offhand comment that he'd successfully used a Canadian tax saving vehicle called flow-through shares (similar to limited partnerships in the US) to help some clients save taxes .... And yes, he had told my friend that these flow-throughs consisted of junior resource stocks.