Client Tales From the Crypt


In honor of Halloween and my memories from watching HBO’s Tales From the Crypt as a kid,  I thought I might share some former client mistakes that I have witnessed over the last 14 years and even share a couple of my own.  These are hypothetical situations based on real life examples. The case studies are for informational purposes only and not intended as specific advice.  Some details have been changed to protect the identity of individuals and all of their names are made up.

Bonehead Bill

Early in my career I had a client we will call Bonehead Bill.  Bill used to argue with me constantly over the value of life insurance.  He even felt that term insurance was a waste of money.  Bill had a young family and every time I saw him I tried to convince him that he needed to protect the risk his family would face if they lost his income.   It seemed that he thought he was invincible since he was young and healthy.  But then one Fall Saturday, Bill died of a heart attack in his driveway while he was washing his car.  He had a small insurance policy through his employer. However, it wasn’t enough to replace his 300K a year income.  His wife had to go back to work to support their two kids.  My take away from the horribly unfortunate event was and is to make sure that I discuss life insurance with every client and make sure that they are protected.

Nervous Ned

But again, having been in the business as long as I have, there is another tale. One such tale, which every advisor seems to have., It is one that takes place during the 2008 financial crisis. Back then, I had many conversations with clients about what was going on during the unprecedented volatility and daily large market gyrations.  Clients who listened and stayed the course through the storm were rewarded with significant returns as of  March of 2009.  However, not everyone has the will to weather a perfect storm, and one such client who did not contain that storm weathering will, we will call him Nervous Ned.  Ned called me in March of 2009 right near the low point of the crisis and, despite my pleadings, decided to sell everything to be 100% cash.  Ned had a balanced portfolio (50% stocks and 50% bonds)  and was only down about 20% from the high market point in October 2007. Even so, Ned had said, enough.  He had listened to the talking heads on CNBC talking about the world coming to an end and decided he was getting out.  I tried to get Ned to invest again and again as the market began to recover from its lows, but Ned always proved too nervous to ever get back in. Thus, the lesson that I learned from Nervous Ned was that some clients need to be communicated with more frequently about what was going on in the market than others, and that a deeper knowledge around behavioral finance proves useful for more reasons than possible market insights.  And If I could go back in time, I would like to get a do over on that conversation.
Red Carpet Lease is Red for a reason

Nevertheless, time goes on, and so there is one such personal tale of my own that goes like this. I leased a vehicle in 2000.  Leasing can be “ok” for some people and situations; however, it proved to be a horrible mistake for me. And in the end, I found myself having to spend $4,000 to clean up my mistake three years later.  The lesson here, leasing only makes sense in certain situations and they are few and far between all of which depend on the fine print.

Keep checking up on as Halloween approaches and there may be some more such horror stories to come. Remember to follow us on twitter @thoriumwealth.
Tales From The Factory on Main
The Crypt Keeper (AKA Peter)
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.