Relationships are all important in the advice market. But socialising with clients, who you might consider friends, can lead to problems. Jenna Towler looks into the pitfalls of mixing business with pleasure...
When experienced IFA Amanda Daughters went out for drinks with her client and fellow directors of Aqua Financial Solutions in early 2010, little did she know the impact that Friday night would have on her career and life.
Daughters, then managing director of the business and an IFA with 18 years’ experience, is said to have offended (or abused, depending on which version of events you read) the company’s client while drinking in a pub following a meeting.
This was later used as grounds for her sacking from the business, after which a tribunal for unfair dismissal was brought by Daughters, but won by the firm.
Why the case of Amanda Daughters poses questions about socialising with clients
However, leave to appeal the decision was granted and she was vindicated earlier this year and awarded £25,000 in compensation for her trouble.
According to Daughters, the client ‘incident’ was never really the centre of the case. She said it was manipulated and used by her colleagues to oust her unfairly from the business. Which, essentially, they did – at a later cost of £25,000 in compensation.
She told PA: “The allegations made against me are not a true reflection of the events of the Friday evening, and I have never admitted to these allegations.
"This has now been proven and upheld by a tribunal and, as I have always known, unfair and wrongful dismal has been well founded.”
The judge in the appeal case ruled “serious disputes of fact” had not been properly investigated by Aqua’s disciplinary team and majority shareholder Carolyn Bennett had put undue pressure on the board to dismiss Daughters.
Nonetheless, socialising with a client after office hours ended with an avoidable ‘incident’ which sparked a huge work problem for both Aqua and Daughters.
Hargreaves Lansdown head of advice Danny Cox says boundaries between advisers and clients are very important.
“I think it is important to keep the relationship on a professional level even when you engage in social events with your clients. Financial planning and helping people with their money is a serious business and should be treated as such.”
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