When a client suddenly discloses $19,000 of credit-card debt

By Daniel Evan Jossen, CFP

I’m meeting with people who have been great clients for years. They have excess money, and we are looking where to put it. For the nth year in a row, we’re going to roll over a CD, but they know I am highly averse to that in this interest-rate environment, and they have a lot more choices open to them. We want something more aggressive and something that had a better profile for them. They laughed about it: “It only took you seven years to crack us out of our CD habit!” So it felt good to have progressed with them.

I have this tool that that I call the financial dashboard to the clients, and while I’m very averse to a meeting with only half of a couple, I’m meeting with just the wife because the husband has no interest in maintaining the software. She is a software geek, which I love — I say geek in a positive way. She’s thrilled by the software, and she says, “Oh, we need to connect to Chase.” I said, “Why Chase?” She responds, “That’s where our $19,000 in credit-card debt sits, Daniel, the ones we can’t get rid of.” What?! Thank goodness it was a GoToMeeting on the phone and she was absent from my office, because I thought I was going to jump on the table and say, “Have you been hiding $19,000 of credit-card debt from me?!”

Addressing the unexpected

I refrained from saying any of that, but she said, “Yes, it’s really hard for us to kick. It goes up, it goes down, it vacillates.” I know so much about these people. So much. I’ve had a terrific relationship with them for a long, long time, and had no idea that sitting on the balance sheet was $19,000 of high-interest credit-card debt. If I had known, I would have recommended paying off that debt as opposed to going into a growth vehicle two weeks earlier. I was thinking about it a lot and came to the conclusion I felt good about: that I was innocently and honestly under-informed.

I’m glad I did the follow-up.  I’m glad I got them back on the on the tool that they were supposed to be using so I could capture all their data. I am now more informed and as money comes in, we’re attacking the credit-card debt, and I’m adjusting the counsel I’m giving them because I now have a different picture. I lamented the initial recommendation I had made, but I didn’t fault myself for making it because I made it with what I thought was complete data.

So that was a big oops. It was a good lesson in making sure you have everything but also the impossibility of having everything and being OK with doing the best you can with what the clients permit you to do.

I’m not sure how I am going to approach it moving forward, but one of the things I ask is, “Is there anything that I’m failing to ask you about? Is there anything else that I should know?”

Jossen is a seven-year MDRT member from Bethesda, Maryland. Hear more in the October episode of the MDRT Podcast.