What should you do if a client displays behaviour that suggests mental illness?
Unless you’re a psychiatrist, you can’t know for certain whether someone is mentally ill or simply going through a difficult time. Nor may you call up a family member to ask about your client’s behaviour — without running afoul of confidentiality regulations.
Ensuring that you are working in the best interests of the client without involving yourself in their personal affairs requires “a bit of a balancing act,” says Leona Tranter, director of standards enforcement with the Financial Planning Standards Council in Toronto. Tranter participated in a panel on ethical issues, including mental illness, during the Financial Planning Week events held in Toronto this month.
What is mental ilnness? The Mayo Clinic defines mental illness as “disorders that affect your mood, thinking and behaviour.” Examples include depression, anxiety disorder, schizophrenia and eating disorders.
If one of your clients displays what you suspect may be symptoms of mental illness, follow these steps to protect your business and act in your client’s best interests.
> Inform your firm
If you notice a significant change in your client’s behaviour, or if a family member informs you of a client’s mental illness, don’t keep that information to yourself.
Inform your branch manager or compliance department of a potential problem with your client. Most firms have policies in place for those situations, says Bruce O’Toole, an associate with Crawley Meredith Brush LLP in Toronto, who also spoke on the ethics panel.
“The worst thing to do is to try to deal with it on your own,” O’Toole says.
> Ensure there’s power of attorney
If the client doesn’t have a joint account with a partner, make sure he or she has filed power of attorney documents.
Many clients believe a POA is a generic document, when in fact each is unique to the individual, says O’Toole. For example, a POA may allow a specific person only to manage the household bills, while another might grant more sweeping authority. Your job at this stage is to determine whether the POA is suited to the situation.
In most cases, the best way to help a client assign a POA is to handle it through your dealer. The firm will ensure legal protocol is followed, according to O’Toole.
Cases in which there is no power of attorney can be difficult. The client’s spouse or caregiver will have to get a court order before you can follow any instructions from them in the client’s name.
> Take notes
Keep accurate notes in case decisions made for a mentally ill client are called into question at a later date.
Note all conversations with a client — and not just specific investments, says Tranter. “If [the client] insists on proceeding with [a decision], “she says, “then at least you have some coverage if things go off the rails.”
> Terminate service
If you are really concerned about the client’s mental state and the instructions they are giving, it may be best to do nothing.
You can refuse to follow the client’s instructions or suggest they find another advisor if you feel they’re acting completely contrary to previous discussions about their financial plan and goals, says Tranter. However, this option is a last resort as there is a possibility that you could “expose yourself to a claim of not acting in the interest of the client.”
IE