Silent or sneaky investors can sabotage their most valuable financial relationship.
Some adult shame amounts to little more than a grown-up version of hiding an empty cookie jar. But too often, the adult piggy bank is at stake. For financial managers, that can set the stage for disaster. "You cannot have trust if the client is withholding information or not telling the truth," says Mark Astrinos, a Palo Alto, California-based memver of the American Institute of CPA's Personal Financial Specialist Credential Committee. "Sometimes clients are embarrassed by their behavior," Astrinos adds. "Other times they don't want to share this information in front of a spouse." Here are eight details never to keep secret from your financial team.
Secret stashes can mean double trouble for advisors. David Edwards, president of Heron Wealth in New York City, relates this story:
"We had a situation last year where we routinely made the minimum required distribution from a client's retirement assets - only to learn he had a 'secret' retirement account from which he'd already calculated and drawn the funds."
Edwards scrambled to return the unnecessary distribution to the account as a 60-day rollover. "Even then, the client had to do extra work to report the rollover for tax filings."