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When a client discloses credit card debt

Daniel Evan Jossen

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Missing client information takes advisor by surprise.

I’m meeting with people who have been great clients for years. They have excess money, and we are looking at where to put it. For the nth year in a row, we’re going to roll over a CD, but they know I am highly averse to that in this interest-rate environment, and they have a lot more choices open to them.

We want something more aggressive and something that has a better profile for them. They laughed about it: “It only took you seven years to crack us out of our CD habit!” So it felt good to have progressed with them.

I have this tool that I call the financial dashboard. While I’m very averse to a meeting with only half of a couple, I’m meeting with just the wife because the husband has no interest in maintaining the software. She is a software geek, which I love.

She’s thrilled by the software, and says, “Oh, we need to connect to Chase.” I said, “Why Chase?” She responds, “That’s where our $19,000 in credit card debt sits, Daniel, the thing we can’t get rid of.”

What?! Thank goodness it was a GoToMeeting on the phone and she was absent from my office, because I thought I was going to jump on the table and say, “Have you been hiding $19,000 of credit card debt from me?!”

Addressing the unexpected

I refrained from saying any of that, but she said, “Yes, it’s really hard for us to kick. It goes up, it goes down.” I know so much about these people. So much. I’ve had a terrific relationship with them for a long, long time, and had no idea that sitting on the balance sheet was $19,000 of high-interest credit card debt.

If I had known, I would have recommended paying off that debt as opposed to going into a growth vehicle two weeks earlier. I thought about it a lot and came to the conclusion I felt good about: that I was innocently and honestly under-informed.

I’m glad I did the follow-up. I am now more informed and as money comes in, we’re attacking the credit card debt. I’m adjusting the counsel I’m giving them because I now have a different picture. I lamented the initial recommendation I had made, but I didn’t fault myself because I made it with what I thought was complete data.

That was a big oops. It was a lesson in making sure you have everything, but also being OK with doing the best you can with what clients give you. Going forward, one of the things I am going to ask is, “Is there anything I’m failing to ask you about? Is there anything I should know?”

Jossen is a seven-year MDRT member from Bethesda, Maryland.

Contact Daniel Evan Jossen at djossen@mindfulwealthpartners.com.

 

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