Advisers Can Stave Off Client Suits with Frequent Communication

April 14, 2011Articles Westlaw News & Insight Securities Blog

Now that you have secured a new client relationship after conducting adequate due diligence, the question that often arises for a financial adviser is how do I further protect myself from potential claims. Unfortunately, in our litigious society, there is no perfect way to protect yourself; some customers are simply predisposed to sue when there is an issue. Nevertheless, there are some simple guidelines to follow that will put the odds in your favor to avoid lawsuits.

The most important guideline is to have open, honest and frequent communication. The surest way to expose yourself to trouble is not being responsive to your clients. It is also somewhat self-evident that advisers who do not have frequent communications with their clients will be advisers with no clients.