An 87-year-old long-time client recently sold his house, moved into a smaller retirement community unit nearby, and wanted to add to his investment portfolio. He was comfortable financially, but not excessively so. Lee and he attended the same church; they were brothers in the Lodge.
As they talked over lunch, the client revealed something unexpected: all of the proceeds from his home sale had gone directly into purchasing his new home, free and clear. His plan was to borrow against that new home at low interest rates, hand the money to Lee to invest at the higher returns he had consistently experienced, and pocket the difference.
It was, on the surface, a logical idea. But Lee immediately recognized what the client could not see from where he was standing: the very real dangers of borrowing to invest at 87 years old, when a sudden need for liquidity could unravel everything in an instant.
"I gently explained that he was fine exactly as he was, and to simply enjoy the mortgage-free home and the financial freedom his life's work had given him."
— Lee HollingsworthSometimes the most valuable thing an advisor can do is tell a client not to act. Protecting someone's financial security means being willing to decline business when the business is not in their interest. This is what a fiduciary standard looks like in practice — not as a legal obligation, but as a personal one.