Philippa Gee: Why the phrase ‘know your client’ is so important

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So there I was, meeting a potential new client yesterday afternoon and talking about her approach to money. Just to be clear, this was someone who has accumulated enough wealth already that she didn’t have to dream of winning the lottery.

We talked about how she had dealt with her investments so far, as she had managed the money herself up to this point. We then talked about how that might change if she were to come over to the ‘Philippa Gee’ side.

What really threw me was her main question, which was as follows:

“So, when you say “cash” what do you mean?”

She was not questioning whether cash was referring to a money market instrument or a complicated cash-type derivative; she just honestly did not know what cash was. Considering how much she had invested in various accounts, it was a surprise to appreciate that she literally had no idea what was involved.

The next client was quite the reverse, perhaps not as much money to invest but she wanted to analyse, in detail, the alpha/beta of her existing holdings and as we talked, gave a vivid description of how TERs do not in themselves provide the full picture when looking at charges.

So my point? Well it just serves to remind me that the phrase “know your client” is an understatement. How we describe investments, produce reports and communicate with clients should be as bespoke as possible to help treat the client as the individual they are.

Obvious? Perhaps. But a useful reminder nonetheless.

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Philippa Gee is managing director at Philippa Gee Wealth Management.