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Financial Planning, November 1, 2002:
Double Trouble When relatives or friends are also clients, planners need to establish boundaries between what's personal and what's professional. November 1, 2002 The mixing of professional and personal relationships can result in either the best of times -- or the worst of times. When all goes well, it's a rewarding relationship based on trust and understanding. The result is a mutually profitable connection. But when the twin relationship goes sour, it's more than twice as bad. Before providing advice to a family member, friend, or colleague, planners should ask themselves the following questions:
There are clear guidelines available when a relationship might create a conflict of interest. But what about the grey area when there is no ethical dilemma, but proceeding in a double relationship makes you feel queasy? Most planners include family members, friends, and colleagues among their clients. When the individuals and relationships involved are stable, things proceed smoothly. The balance can get delicate, however, and be influenced by a number of complex factors. You may not even know they exist. The first task of managing multiple relationships is to recognize and establish boundaries between the social and business relationship. In ideal conditions this happens seamlessly, and both parties know when and where to discuss what. For example, both parties may prefer absolutely no "asides" about financial issues during a social engagement. Another set of individuals may be comfortable with more fluid roles. Work may take place in the office, but discussion over drinks feels comfortable and congenial to both. If you simply assume you are on the same page, however, you may set yourself up for a rude shock. The remedy is simple but can be overlooked when dealing with someone already familiar to you. Set up your ground rules. Include your preferences about shoptalk and advice outside the office. Assess the other person's preferences and work out the details to make the boundaries explicit. You also need to assess the "entitlement style" of your friend, relative, or colleague. Invisible expectations can make things cloudy. Unentitled clients won't want to intrude and may find it awkward to ask for help -- even when they should. To facilitate the business side of this relationship, you may need to draw them out more. In contrast, entitled clients may be shocked that you won't spend hours on the phone with them at the drop of a hat. This kind of person is often charismatic and a fabulous social partner, but can only respond to clear limits. These work best when set up at the outset. Self-awareness is key. What is your own style? If you have a personal and professional connection, will you have a harder time and feel more responsibility for these clients? Even if their investments are properly placed, will you worry about them too much? If so, make certain you don't act on this concern without considerable thought. People tend to make mistakes when they try too hard to help. Managing boundaries comes more easily to some than others. It's important to know where you are on the spectrum in order to anticipate possible challenges. Are you good at changing gears, or do you resent being jarred out of social mode by a sudden question about a difficult financial decision? Again, the simple but often overlooked remedy is to establish clear expectations up front. If you've slid into something complicated, decide which relationship comes first. Is it more important to sustain the personal or the professional connection? If you need to talk, think through whether the professional or personal setting will bring out your strengths. In addition, do not assume that the relationship that comes first to you comes first to the other person. The dual relationship can create a clash of expectations. While you expect professional cordiality, the client/friend or relative may bring personal issues into the office. In a simple relationship you can resolve any concerns in a way that may not be possible if there are difficult personal dynamics. You need to be clear when you will absorb the inconvenience and when to re-establish role definition. Most important, don't wait until the situation gets out of hand. Intervene early. Managing conflict is trickiest when the two relationships include a role reversal -- when the planner is the authority in one setting and the client is the authority in the second setting. This is particularly true if you feel you are delivering far better services or making more of an effort than your client. When you are the authority figure in both relationships, there can be an additive effect. The clients may experience the relationship as "hotter" than you do. There may be invisible turmoil on their part that they don't reveal. For example, if you respond to a long e-mail with a short and "professional" one, they may feel hurt, even if their question was professional. Be aware of this possibility if something feels off-balance in the relationship and you're having difficulty figuring out what the problem might be. When a client is also a relative, friend, or colleague, the work can be hugely rewarding. You are personally interested and invested, you give good service, and they love you for it. By remaining aware of what can go wrong and how to adjust your actions, you increase the chances that you will have the best of times when there is a multiple relationship. Carol M. Kauffman, Ph.D., and Marcia C. Brier are partners in Family Legacy Services, a consulting service to financial advisers, family offices, and private client departments. They can be reached by e-mail via carol@carolkauffman.com or mbrier@mcbcommunications.com.
-Carol M. Kauffman and Marcia C. Brier |
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