By Jeff Sanford
(June 2 – 09:00 ET) Richard Steinecke, a lawyer with Steinecke Martin Maciura of Toronto, led a group of financial planners through the do’s and don’ts of financial planning practice during a session yesterday afternoon at the 16th annual Canadian Association of financial Planners conference.
His message was simple: If you want to stay out of court, communicate.
Steinecke cited the Laflamme case, where a brokerage was fined $1.5 million after one of their brokers lost $2 million of a clients assets in speculative investments that the client wasn’t aware of.
“Knowing you client isn’t enough,” says Steinecke. Keeping track of who expects what through constant communication is the best way to stay out of court.
“Use forms and checklists to keep track of expectations. Taking good notes is also helpful. That’s the sign of a good practitioner,” said Steinecke.
In a court of law the general rule is that if their are no notes the client’s word is believed. If there are notes, then the judge will usually believe those notes.
“This holds for 90% of cases,” said Steinecke.
Steinecke laid out seven steps to stay onside of the law.
- Good communication is key.
- Keep up with current practice and developments in your field.
- Never do anything you feel uncomfortable with.
- If in doubt, ask.
- Make sure your staff is reliable.
- Install good record keeping systems.
- Never cover up mistakes.
“You will get caught if you try to cover up,” says Steinecke.” Don’t do it.”