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It happened to me

Matt Pais

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When attorneys solicit you to report on other advisors
Member: Heather Lindsley, LUTCF, RICP, a three-year MDRT member from Green Bay, Wisconsin. She works with clients in their mid-to-late 20s who are often in their first job. Lindsley helps them determine how to pay off student loans, purchase a home and save for retirement.

Background information: Increasing regulation in the U.S., driven by the Department of Labor’s fiduciary rule to ensure advisors work in the client’s best interest, has created concern that advisors will be sued more frequently by clients unhappy with outcomes, regardless of intent.

What happened: Lindsley’s office received a five-page mailing from attorneys (who’d also reached out to many other advisors in the area) requesting information about advisors who anyone believed were not fulfilling their fiduciary duty. The letter asked questions about everything an advisor should be doing and requested reports about anyone who was not doing those things; the attorneys’ goal was to then work with those advisors’ clients to take legal action. “They were literally asking you to pick apart your colleagues and turn them in for not doing something the right way,” said Lindsley, who did not participate.

What she learned: The letter was a reminder of the importance of compliance, and that attorneys’ attempts to attach clients to class-action lawsuits will only continue. Lindsley said some advisors wonder if one day attorneys will create billboards asking “Do you own this product? If so, call ___” similar to those that now ask about illnesses, for the purpose of filing lawsuits.

What happens moving forward: Lindsley already ensured that she was not only always working as a fiduciary, but also documenting everything about her work with clients to prove it. If a client, for example, declines a long-term care policy, she makes them sign a document confirming their declination so no one can say later it was never offered. She said that while she and other advisors in town put little thought into the mailing they received, it is a reminder that there is no detail too small to document to prove you are present in the meeting with the client.

Heather Lindsley


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