We recently helped a client who was in the midst of an exciting time in his life. After many years of hard work, he sold the company he built and went from having a little bit of savings to having life-changing wealth. Wanting to be prudent with this big financial windfall, he came to us for help to ensure he was making the best possible choices for his family’s financial goals.
As the client’s financial planners, our job was to help him organize and optimize his new-found wealth. We did more than recommend he invest his wealth into a low-cost, broadly diversified portfolio. We also spent time with him, working to understand his goals. Using this information and our financial planning experience, we strategized how to use his new wealth to reach his goals.
Interestingly enough, one of the client’s top concerns was client-advisor confidentiality. The company buyout was an incredibly exciting time for our client. But, it was also nerve-racking. When our client came to us, the details of the buyout were still inside information. He wanted to make sure the news of the buyout stayed out of the public eye until the appropriate time; he wanted to ensure what he discussed with us was kept confidential.
This begs the question:
Is what you discuss with a financial planner confidential?
Financial Planning Client Confidentiality
When it comes to whether or not client-advisor confidentiality exists, the answer is: It depends.
Unlike lawyers, financial advisors do not have attorney-client privilege. This means that what is discussed between a lawyer and their client may be kept private.
For financial planners, client confidentiality is similar – but different. For the most part, everything discussed with our clients is kept confidential. This is because client confidentially is a requirement of CERTIFIED FINANCIAL PLANNERTM professionals. (Taylor and I are both CFP® professionals.)
Of course, there are exceptions for CFP® Board imposed client confidentiality – such as in response to a proper legal process. If you’re interested in when you can’t expect confidentiality from your CERTIFIED FINANCIAL PLANNERTM professional, you can read about them here.
CERTIFIED FINANCIAL PLANNERTM Professional Client Confidentiality
Our client experiencing the company buyout didn’t check any of the boxes for an exception to client confidentiality under the CFP® Board Standards of Professional Conduct. So, when our client asked us about client confidentially, we let him know about those very standards. And with that, our client was able to rest assured that the details of his company buyout would stay between him and his CERTIFIED FINANCIAL PLANNERTM professionals.
Because of the trust established by our professional client confidentiality, our client was able to spend time dreaming about the next phase of his life: starting a new company. For some (this client included) work is a passion; true entrepreneurs can never really quit building and creating. We can definitely understand that. In the end, it was our privilege to help our client organize his wealth and make a solid plan for his future – all confidentially, of course.