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Trustees – how far should our fiduciary duty of care go?

Trustees - how far should our fiduciary duty of care go?

As professional trustees we have a legal duty to ensure that we always act in our clients’ best interests, but in these times of great uncertainty, do we also have a deeper duty of care to fulfil? Often with key clients, we become part of their inner circle and can sometimes be asked for advice outside of our scope of expertise. The unique relationship between advisor and client makes it difficult to stipulate which areas fall inside or outside an advisor’s professional remit. Given the inextricable link between private and professional concerns, the advisor is increasingly called upon to take a broader overview.

This is one of the reasons we’ve always championed a collaborative approach to planning at KHTUK, working not only with clients but also with other professional advisers to ensure we can offer a service that benefits the client in the most comprehensive sense. Economic uncertainty surrounding Brexit and the ongoing coronavirus pandemic has led many high-net-worth individuals (HNWIs) to review their plans. Given the significant implications for the client’s family and businesses, the weight of succession planning can be stressful at the best of times, however, in the present climate it can feel overwhelming.

When it comes to mental health, many advisors might feel that this is one area that falls well outside their remit. Yet organisations are increasingly recognising that a professional duty of care extends to mental health and implementing mental health policies as good business practice. As the taboos surrounding mental health issues are challenged, so too are the boundaries between professional and personal concerns. Advisors could find themselves in the unique position of observing when their clients are showing unusual signs of stress and strain, or receive client confidence to this effect. In this instance, facilitating access to a professional mental health advisor is in the best interests of the client, yet how do advisors navigate this potentially delicate territory?

Jonathan Edgeley is the Commercial Director at Sanctum Healthcare, a firm specialising in providing a unique 360’ mental healthcare service specifically tailored to meet the needs of today’s HNW/UHNWIs and their multi-generational families.

KHTUK’s James Heathcote spoke with him recently to discuss the issue.

Every advisor wants to be ‘trusted’ by their clients, but is mental health and wellbeing really part of that contract?

We need to remind ourselves that mental health affects all of us, in much the same way as physical health does. The major differentiator between average advisors and exceptional ones is the ability to  go that extra mile when it comes to proactively safeguarding their client’s interests. To this end, why wouldn’t we look out for signs of emotional distress or burnout which can have serious repercussions if not addressed.

As professional advisors, how do we know what to look out for as a sign that a client might need some assistance?

There are clearly multiple scenarios that can present themselves over the course of your tenure with a family. You may become aware of potential areas of stress and strain simply by observing changes in a client’s appearance or mood. For example, you may see them become more withdrawn or distant. They may also make direct or indirect reference to their feelings and concerns. When our clients are going through stressful situations, such as next generation planning, the sale of a business, or issues within their family, we should naturally become more vigilant.

We can provide private client advisors with guidance on mental health issues which can help them to become more attuned to their clients and respond accordingly. The important thing is to be able to recognise signs of mental distress and ask if they would consider some trusted professional support outside of the family. This has often resulted in us working together to help their clients and families move through emotionally distressing times and in some cases serious addictions.

If we recognise that a client might need mental, emotional, or psychological support, how do we begin that very delicate conversation?

I would always recommend you call upon expert counsel before initiating such a delicate conversation. While the unique relationship between the advisors and their client can facilitate this process, advisors are not mental health experts. Mental health is regulated by the highest levels of confidentiality and clinical practice, and while we can offer guidance to advisors on how to proceed, it’s important that the right professional support is quickly put in place. In my experience, there is a window of opportunity to help, if it is missed then it could be some time before it opens again.

There will be potentially complex dynamics at play. It may be that the client themselves needs help, or it could concern a family member or loved one. If appropriate, our approach might be to include the family in the creation of a ‘family support team’ where our professional guidance and insights can help develop some internal family scaffolding.

Can you give an example of a situation where a professional advisor has introduced a client who needs help or guidance, and what the outcome was?

Passing on the reigns of the family business is an important time for any family, and one that can be fraught with emotion. We recently worked with a family where the natural predecessor was deemed as ‘unfit for duty’ by the board. Concerns had been raised about the individual’s behaviour and poor leadership, but had subsequently been left unresolved owing to the board’s fear of potential ramifications.

Our team were drafted in to advise on the situation and create a plan that would minimise the chances of possible reputational damage. Our approach is always to lead with compassion, and without judgement, shame, or blame. In this situation we worked towards educating the board and other family members on addiction and the process of recovery so they could manage their expectations. In addition to arranging an initial treatment plan for the individual, ongoing support included sessions with a psychologist, a personal trainer, yoga coach, nutritionist, and a private chef. Over a 6-month period the client was gradually integrated back onto the board with a strategy that suited all parties

We often advise multigenerational families on a wide range of issues. What issues might such families face, and what should we be looking out for?

Succession is usually when we start to engage with a family, as this naturally tends to bring out concerns and considerations surrounding the transferral of responsibility and control. The potential impact of such transitions makes it important to minimise any negative fallout. If handled correctly, succession can be a constructive process where issues are addressed in order to move forward.

Recently we have seen an increase in digital addictions – such as obsessive use of mobile devices for social media and gaming. This is a serious issue that can be linked to concerns surrounding body image, social standing, and reputation, which I imagine many people can relate to.

We also act for a lot of business owners and C-suite executives. There has been a lot in the press recently about “burnout” what exactly does this mean, and how can we look out for clients in high-pressured jobs?

Burnout has fast become a big problem for people who work excessively or obsessively. In the 80’s and 90’s it was no different, however our culture has changed, and the economic climate has become more fragile. Families are looking at how they can become more creative with wealth preservation, which requires another level of focus and hard work.

With advancements in health monitoring, we are seeing savvier families inquiring about ways to manage their health and avoid burnout. We call this ‘health asset protection’ and we use a unique approach that combines traditional treatments with some game-changing innovations. For example, therapies such as biofeedback allow us to monitor key body functions, helping us to develop responsive and hyper-personalised programmes of recovery for optimal health.

Finally, how can professional advisors build their own mental resilience, and when should we reach out to someone for additional support?

This is a particularly relevant question with the current lockdown restrictions, and one that has multiple answers.  I would suggest focusing on the following:

  • Regular exercise – a great stress buster as well as cardio workout
  • Meditation & Breathworks – important techniques to relax the body and mind
  • Talk / share the load – the weight of holding in stress has an effect on the mind and body and can cause physical and mental illness
  • Eat well – a nutritionally balanced diet
  • Sleep – probably the most important ingredient to building resilience

We would always recommend seeking professional advice in each of these areas. Each of us has our own genetic makeup. Health and wellbeing aren’t generic and a ‘one size fits all’ approach is often ineffective. A personalised approach to physical and mental health is always the safest and most effective option.