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A real-life, non-hypothetical situation re representing a client, conflict of interest, etc. - what
coinguy1
Posts: 13,484 ✭✭✭
A very good client of mine asked me to view some upcoming auction lots, give my opinion on them, and if I liked them, represent him in trying to obtain them. If successful in the bidding I would be paid a commission, otherwise, not.
Two different people (both of whom I am friendly with, but neither of whom I have done business with since venturing out on my own again) subsequently asked me for my opinions on a few of the same coins. The subject of fees/compensation was not brought up by them or myself.
Should I have :
1) Said :"Sorry, I'm already representing a client and cannot comment on these coins." ?
2) Said : "I'd be happy to provide my opinion, but need to be compensated for doing so." ? If they agreed to that, should I have made them aware that I was already representing someone and should I have told my client about it?
3) Given them vague or negative information about the coins, even if I liked them, to discourage the competition from bidding against my client?
4) Other?
To be continued......
Two different people (both of whom I am friendly with, but neither of whom I have done business with since venturing out on my own again) subsequently asked me for my opinions on a few of the same coins. The subject of fees/compensation was not brought up by them or myself.
Should I have :
1) Said :"Sorry, I'm already representing a client and cannot comment on these coins." ?
2) Said : "I'd be happy to provide my opinion, but need to be compensated for doing so." ? If they agreed to that, should I have made them aware that I was already representing someone and should I have told my client about it?
3) Given them vague or negative information about the coins, even if I liked them, to discourage the competition from bidding against my client?
4) Other?
To be continued......
0
Comments
<< <i>Should I have :
1) Said :"Sorry, I'm already representing a client and cannot comment on these coins." ? >>
This is the only real course of action as how can you truly represent multiple parties over the same coins? Conflict of interest would be impossible to deal with otherwise.
<< <i>2) Said : "I'd be happy to provide my opinion, but need to be compensated for doing so." ? If they agreed to that, should I have made them aware that I was already representing someone and should I have told my client about it? >>
If all you were doing was giving an off hand opinion to a friend it's OK. But to want to be paid for it, you would cross into a conflict of interest with the first client's interests.
<< <i>3) Given them vague or negative information about the coins, even if I liked them, to discourage the competition from bidding against my client? >>
Not ethical or moral. Many might do this, but honesty is the better policy. Tell them you are representing someone and that you can't help them.
<< <i>4) Other? >>
Scenario one is the best.
NoEbayAuctionsForNow
Whoever is careless with the truth in small matters cannot be trusted with important matters.
<< <i>You need to have a firm, written, policy and fee schedule. The client who wasn't going to pay you unless successful put you in an ethical dilemma. Start charging a fee whether they are successful or not. >>
I thought about that. Whatever happened, I think it would be good to have this and related policy worked out so this type of situation, should it or a counterpart arise, can't blindside you.
Best,
Billy
If they subsequently ask you to bid in their absence then further conversation and (fee) understandings come into play.
You would have to commit to one individuals interests when it comes to the actual bidding. The other parties would either need to bid for themselves or find other proxies.
(disclaimer: These are my own personal opinions and thoughts. Nothing is implied or suggested as fact)
"Senorita HepKitty"
"I want a real cool Kitty from Hepcat City, to stay in step with me" - Bill Carter
TorinoCobra71
Since Client A is "a very good client of yours", you may know their personal
likes/dislikes and while you may not like a particular coin for Client A, it may
be fine for Client B or C.
Or, while a particular coin might be very nice, Client A might only be willing to
spend a certain amount on it - possibly an amount that you feel will not win
the coin and therefore you'll not be compensated for your time. Client B or C
may be willing to bid higher.
In any case, the ethical thing to do is probably tell B & C of your previous
commitment to Client A and that you may or may not be able to help them,
depending on how Client A wishes to proceed after your viewing.
Good luck!
Ken
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
Question for you in return, though:
RE: Your answer #2, is it typical for you (or other dealers in general) to be compensated for an opinion? To me it's obvious that compensation would be provided for bid repping, but not sure about an opinion. I would imagine, and hope, a consulatation fee would be appropriate to prevent "tire kickers" from wasting a lot of your time.
<< <i> A very good client of mine asked me to view some upcoming auction lots, give my opinion on them, and if I liked them, represent him in trying to obtain them. >>
The problem came when you agreed to represent him during the bidding. Otherwise, you wouldn't have a conflict. As a result, I fear your only option is #1.
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
Self Indulgence | Holey Coins | Flickr Photostream
<< <i>were the words 'done deal' ever uttered? >>
What does "Done Deal" mean?
Specializing in 1854 and 1855 large FE patterns
<
I think you need to present the situation to customer A and get guidance from him whether it be max bid info, if he is ok with you giving an opinion to someone else, etc. In effect, if you don't win the bidding, you haven't officially been hired by customer A. If his bid wasn't high enough to begin, there is nothing you can do and you won't get paid on top of it.
I have never found you anything but up front. So My guess is that you would tell the #2 and 3 persons that you were already looking at the coin for a client. If the client #1 decided not to bid then I would think a call to the others ( perhaps in order of contact) and tell them what you think.
Assuming that both you and your client agreed to the deal, you then had a fidicuary duty to this party to not reveal anything about the coins to anyone else.
Ray
Why not charge your client a flat fee for representation whether the coin is purchased or not. This solves two problems, 1. You get paid for your time and more importantly, 2. The client doesn't ever have to be concerned with the bid being "run up" or question why you bid so high, because you would have agreed upon how high to bid to begin with and since you are not working on commission, there is not incentive for the coin to sell for more money. Seems like the most advantageous approach for the collector.
That's what I do and it seems to make the most sense.
If someone asked me if I liked a coin I would certainly give my opinion, but I would not represent more than one client on any given lot.
Liz Coggan, J J Teaparty, Inc.
I'm personally involved and can tell you that Coinguy1 was a perfect gentleman, as always.
mr1874 makes a valid point. Let people wonder if your unwillingness to talk is due to your preexisting intention to bid (for a client or for stock) or the fact that you are the consignor.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
I've seen this happen. A coin might get auctioned off for say $500. I've seen this dealer tell the auctioneen to mark it up to $600 (hypothetical numbers) because he had a competition between those whom he was representing.
#2 then #1
I think first you need to explain you are not a charity service and expect compensation for your professional services.
Then in order to demonstrate your professionalism, explain there is a potential conflict of intrest arising from a prior agreement with another client ( but you don't have to charge them for that statement
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since 8/1/6
<< <i>
<< <i>were the words 'done deal' ever uttered? >>
What does "Done Deal" mean?
I was going to make a can of worms comment here, but then noticed the author.
never mind . . .
The first person (who asked me about any of the coins I had viewed for my client) called and asked my thoughts on one particular coin in the auction. He had interest in it and wanted to make sure I liked it ok. I told him I thought it was a very nice coin and that I was bidding on it for a client. There was no discussion about my representing him, what I thought it might/should bring, etc - end of conversation.
I later told my client that I had received such a call, that I'd told the other guy I liked the coin and that my client would probably be facing strong competition. He seemed ok with what I had done.
A few days later, someone else contacted me and asked me (this is not an exact quote) which, if any examples I liked of a particular type/design in the sale. I mentioned the two representatives of that type that struck my fancy and told him, for purposes of full disclosure, I was bidding on them for a client. End of conversation. I don't recall whether I told my client about that "conversation" or not, but I have made him aware of this thread.
My choices under this scenario did not constitute a "no-brainer" course of action, to me, or I wouldn't have posted this thread. I tried to balance being helpful to those who contacted me, vs. representing my client, and to be above board with all concerned.
Based upon the replies here, however, I plan to discuss this with my client and see if he would prefer that I say nothing to others, if/when there is a next time.
Thanks for your feedback.
now expect a call from Russel, he wants you to examine all the hairyhead coins at the next major auction!
"Senorita HepKitty"
"I want a real cool Kitty from Hepcat City, to stay in step with me" - Bill Carter
It doesn't make sense for a dealer to bid represent more than one person on an auction lot. As to option #2, Liz at Teaparty suggested you charge an observation opinion fee which I personally do not like; winning bid fees only I believe the right way.
Aaron
it's so obviously correct.
But think about it for a minute. If Coinguy tells you, "I can't discuss that coin because I'm representing another collector", is that any different than telling you, "I like the coin, and in fact I'm bidding for a client".
Pretty much the same information is transmitted......
So, the right answer is a bit more nebulous than it was at first glace.
The perception is the reality, Perry. Would you ask your friend, who happens to be a lawyer and is not your brother,sister, aunt or uncle, for free legal advice?
Whoever is careless with the truth in small matters cannot be trusted with important matters.
<< <i>"Saying "no comment" to a friend sounds rude to me."
The perception is the reality, Perry. Would you ask your friend, who happens to be a lawyer and is not your brother,sister, aunt or uncle, for free legal advice? >>
If I had a business relationship with a coin dealer and I spent a ton of money with that dealer, I don't think its out of line to ask his opinion of a particular coin. If I asked him to represent me in an actual coin transaction I would certainly expect to compensate him for his efforts. But if he sent me a bill for answering a simple question I would take my business elsewhere.
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
I would feel no obligation to the first party but would not want to do anything which might preclude a deal.
When asked about the coins I would say that I might be representing someone else in their purchase and
then answer any questions as honestly as possible while leaving all professional opinion aside. If they of-
fered money I'd probably leave the first guy in the dust unless we had done this exact type of deal before.
It wouldn't be worth jeopardizing a relationship with a good customer so he'd be the first to know if I were
hired by another to purchase or give an opinion on a coin. It would be critical to tell the same thing to both
parties.
“It ain't what you don't know that gets you into trouble. It's what you know for sure that just ain't so.” Mark Twain
Newmismatist
if i had to choose
then number one