Should you manage your client's estate?

Should you manage your client's estate?

Should you manage your client

But, what if a client insists you are the right person for the job?

Leacock says that, regardless of this, he would candidly explain why he felt he was not the suitable person for the role.  “I would give them my honest opinion and feelings on that situation. I would spell out for them what that might mean down the road,” he says. “Sometimes there’s enough conflict between how things are going to be designated in a will without them (the family) fighting with the executor.”

Leacock, instead, would advise his clients to consider their own lawyer or accountant, or would recommend them to at least three third-party providers from his roster of referrals. Only if a client lacked confidence with his referrals, would he consider taking on the role.

“I provide at least three names so they can do their due diligence. I leave it up to them to make that decision,” he says. “If they decide that they are not comfortable working with any one of those people then at that point, I may consider it (the executor role).” 

Leacock does admit, however, that there may be situations where the advisor is the best candidate such as if a client is elderly, has no children or extended family; or has underage children. Taking the decision out of the courts' hands may also be a priority.

"At the end of the day, if you look into the future, (the client) has chosen someone they can trust or they know will be looking out for the best interest of the family after their passing," says Leacock. "That’s really the biggest thing."

In most instances, both the Investment Industry Regulatory Organization of Canada (IIROC) and the Mutual Fund Dealers Association (MFDA) prohibit advisors from acting as executors to client estates.

Would you consider being, or are you, the executor of your client's estate? Tell WP your thoughts in the comment box below.

Related stories:

Death or retirement – what happens to your clients?

Standing on guard for elderly clients

read more > 1 2

  • Brian D 2014-02-10 12:23:06 PM
    IIROC Dealer Member Rule 43 (See IIROC Notice 13-0162) will restrict most instances where an advisor would act as an executor for a client.
    Post a reply
  • Bob Thompson 2014-02-10 12:26:52 PM
    Most firms prohibit their advisors from taking on the role of executor except for family and due to potential conflicts of interest that is the best course for any advisor. There are professional executors available
    Post a reply
  • Myron Neufeld 2014-02-10 4:45:22 PM
    Our experience suggests advisors are taking on the role...our advice: 1) ensure an 'estate specific' investment plan is completed; 2) limit exposure to conflict of interest by having another party manage assets; 3) know and understand that as the personal representative of the estate your liabilities extend well beyond investments so protect yourself accordingly.
    Post a reply