Death, Delusional Clients and Other Hard Lessons From a Breakaway Broker

"I'm a better advisor [today] by owning my own business."

Collins recounts other lessons in the book, including one learned from a client called Frieda. An unmarried woman with just a high school diploma, Frieda was the daughter of a New York City cab driver and suffered from mental illness. Despite her humble background, she had slowly built up a portfolio worth $1 million. She had no close relatives other than an estranged brother.

"As a team we discussed firing Frieda many times because she was verbally abusive; I left it up to the team to vote," Collins said.

The team decided to keep her on, and indeed came through for her in her hour of need.

"One night walking the streets in a delusional state, Frieda wound up taken to a mental hospital. I helped her hire social workers."

This experience with a difficult client taught Collins his business was not about making money but about making a difference. "It's about taking care of people, about why an advisor should go beyond duty," he says.

"We are making a difference in people's lives. That's why our assets are going up in this negative environment," he added.

Another key lesson the financial advisory business has taught Collins is the necessity of perseverance in the face of adversity. Despite the reluctance any advisor would have admitting to having been sued, Collins' book details an arbitration brought on by a disgruntled client and how he won.

Back in the go-go late '90s, Collins had a real estate developer client eager to take on risk to increase his portfolio returns. Collins had arranged for the client to devote 10% of his investment net worth to aggressive investments, which were doing quite well in 1998-1999.

"He wanted to take money out of his conservative portfolio and put it in his fast-paced portfolio. I said, 'Send me a letter and explain to me in detail' why he wanted to do this.

"Months later he wanted to do it again," so Collins asked him to write another detailed letter. When the tech sector exploded in 2000, the client sued Collins.

To win the case, Collins' lawyers used a simple but compelling strategy. They blew up the two letters to 6 feet by 4 feet, and kept pointing back to the letters every time the client's attorney made a point about broker malfeasance.

"Firms always want [advisors] to settle, but I took the risk of fighting it and I won it," Collins says.

His book details another trying legal challenge when the FBI drew him into their investigation of a client suspected of fraud. "The legal people were telling me to get rid of client at a time when the family needed me most," Collins said.

The lesson this teaches brokers, he says, is the need to persevere. "It's unusual when situations like this happen; but when they do happen, you can't quit, you can't run," Collins says.

That's also a lesson Collins took to heart when he took upon himself the difficult task of publishing a book of this kind and pushing it through compliance. "Lawyers and compliance don't want you to do anything. But I just wanted to give back some nuggets to the world in our industry and outside of the industry," he says. "You've got to have principles and goals."