Dealing with wealthy (or non-wealthy) clients can sometimes be quite painful. Like when they get ideas in their heads and they insist that people accommodate them, even when it’s impossible. These are the times that professionals either have to bring the individual back to reality or walk (run) away.
Let me share some of the experiences I’ve had in this regard:
One client was in his late 50s, worth about $200 million and aware of the value of life insurance in managing estate taxes. The problem was his lack of interest in undergoing a physical exam. “Why do I need a physical? I play tennis twice a week,” he said.
The personal probing involved with obtaining life insurance actually makes more than a few individuals unhappy. The fact that insurance companies need to know a person’s medical history to effectively gauge risk is beside the point. “I don’t see why I have to tell the insurance company about the two psychiatrists. It’s not like I’m crazy or anything,” a near-billionaire said.
Then there was the exceptionally wealthy industrialist who asked his advisor for a feat of investment magic that would have resulted in the advisor being stalked by rich people throughout the world—including myself. “I only want you to invest in hedge funds that will go up 20% or more,” the industrialist said. “Also, I don’t want to take any risks.”
With some clients, love is forever, until it isn’t. “I want you to change the prenup and I don’t want you to tell her,” demanded a seriously wealthy client. “If you don’t do it, I’ll find a lawyer who will.” This situation deteriorated quickly, to the point where it became the attorney’s fault that the client got married in the first place.
The patriarch of a renowned family considered it a personal affront when the sugar baby with whom he had an agreement—and whom he found off a Web site—attempted to extort money from him. Not wanting to involve the police, he resolved the matter with the assistance of a private security company. The settlement got him upset, but not due to the cost. “How dare she ask for money. Doesn’t she know who I am?” he exclaimed. Yes, she knew who he was and that’s why she asked for the money.
The issues that the wealthy confront are actually not materially different than those of the lesser affluent. What it comes down to is the extent to which professionals are willing to deal with the difficulties. If the payoff is meaningful, then dealing with irrational clients usually isn’t all that bad.
