How much responsibility do you have to a good friend to provide advice even if you have reservations about disclosing too much about yourself in the process?
That’s essentially the question a reader we’re calling Dempsey emailed me recently. Dempsey has been good friends with Joan for more than a decade. They’re neighbors. They socialize regularly. And when one of them has been in need of help over the course of their friendship, the other has stepped up with little hesitation.
But recently Joan decided to retire from her job. Because most of her retirement funds were set aside in self-directed retirement accounts she would have to manage how her retirement money was invested as wisely as possible to make sure it lasted for the duration of her retirement. Joan decided that she would be wise to seek the help of a financial advisor to guide her through the investment process and to establish a sound plan for her retirement. Joan was pretty confident she had set aside enough retirement savings to last which played into her decision that she would finally be able to retire from her job.
“Joan sent around a note to a bunch of friends asking if any of us had worked with a financial advisor we liked,” writes Dempsey. Dempsey is not yet retired, but it turns out she had been working with the same financial advisor for at least the past three decades and had always found his advice to be helpful and sound. Even during economic downturns, Dempsey writes that her advisor had taken the time to contact clients to reassure them and to let them know how he planned to respond.
“I would recommend my financial advisor in a heartbeat based on how good he’s been in helping me plan for my future,” writes Dempsey. But Dempsey is hesitant to recommend him and here’s why. Her financial advisor directly manages his client’s money and takes a percentage of how much he is managing as his compensation. He has a minimum portfolio requirement for any new clients he takes on.
“I’ve always been pretty private about my finances,” writes Dempsey. Even though the minimum portfolio requirement was much lower when she started working with him years ago, she feels uneasy about her friend knowing how much money she has or assuming she knows how much money she has.
“Is it wrong for me to not recommend my advisor even though I believe he would be a great resource for my friend?” she asks.
It’s highly unlikely that Dempsey’s recommendation would be the only one Joan received. It’s also unlikely that her advisor is the only one who could provide Joan with good advice. It’s pretty likely Joan has a sense that Dempsey has been saving some money toward retirement. Knowing the minimum amount the advisor will work with doesn’t really tell Joan exactly how much money Dempsey has if that’s her largest concern.
The choice Dempsey has to make is whether she values her financial privacy more than she values giving a recommendation to a friend. That choice can only be made by Dempsey and the right thing is to decide if recommending her advisor would outweigh any discomfort she might feel about Joan knowing she might have a minimum sum of money at her disposal.
Jeffrey L. Seglin, author of The Simple Art of Business Etiquette: How to Rise to the Top by Playing Nice, is a senior lecturer in public policy and director of the communications program at Harvard's Kennedy School. He is also the administrator of www.jeffreyseglin.com, a blog focused on ethical issues.
Do you have ethical questions that you need to have answered? Send them to jeffreyseglin@gmail.com.
Follow him on Twitter @jseglin.
(c) 2021 JEFFREY L. SEGLIN. Distributed by TRIBUNE CONTENT AGENCY, LLC.
No comments:
Post a Comment