Get it In Writing

Documentation is the First Line of Defense & Protection for Financial Professionals and Their Clients.

So while introducing best practices will add more paperwork, it may add some degree of protection. The engagement letter is a lost art of business. In the past an engagement letter outlined the talking points of previous meetings, the engagement of the financial professional and the expectations of both parties. It  spelled out those expectations with scheduled performance reviews and accountability that included remedies for nonperformance. The engagement letter became the road map or blue print of the relationship going forward.

Sometimes the biggest illusion between financial professionals and their clients is that communication has occurred between them. A review of stored communication often reveals a tributary of conversations in which both parties feel they weren’t heard. What was said was not what was meant.  One of the biggest areas of non-compliance is communication without documentation. There are so many communication modes in our culture: texting, email, voicemail, real mail, video and audio recordings. Ideally every one of these communication modes should be stored in secure environments in the cloud or hard copy. If arbitration becomes necessary, the documentation may very well develop into evidence that can support the claims of either party.

When disputes between financial professionals and their clients occur, one of the most egregious items in arbitration is not returning correspondence or phone calls. Many disputes can be resolved by meeting the dispute head on and with patience. But every day a response is delayed is another step closer to the client feeling they are being ignored and that their contentions are true. That leads many frustrated clients to make their next call to their attorney. Once the attorney is involved the price of satisfaction becomes higher and the scrutiny of your practice intensifies.

It’s really in the best interest of both parties to keep the lines of communication open and documentation maintained to protect everyone’s interests. Everyone should have mutual benefits from the relationship and getting it in writing is the first step towards establishing it.