He went in for a complete physical at the strong recommendation of his concierge health-care provider. The concierge got him into one of the foremost teaching hospitals in New York. It also had a hand in specifying the exact type of physical he received.
The problem was that the one-day, all-inclusive physical performed by the doctors of this renowned hospital was lacking. For instance, he had to wait 45 minutes, hooked up to an EKG, for his echo stress test. Then there was a lot more waiting coupled with a fair amount of name-dropping by the physicians and staff.
The low point for the wealthy individual (and the high point of this anecdote) was when two of the physicians told him how much they hated conducting physicals for wealthy patients. The physicians said they felt rushed and that they couldn't really do a good job-hopefully not to the point of making any serious mistakes. These comments, of course, had the individual overflowing with confidence.
The individual refused to pay for the physical and you can take a guess at what he did with the concierge that recommended the hospital. The type of sloppy due diligence displayed by the concierge is more common than you might think among professionals who work with the wealthy.
Let's consider another example. A leading money manager was asked for a reference to a family security firm by its largest client, a billion-dollar-plus family office. One of the firm's key principals recommended a security firm whose senior executives are regulars on the family office conference speaking circuit. Please note that this was the extent of the due diligence conducted by the money management firm.
Based solely on the money manager's recommendation, the family office hired the security firm to install a state-of-the-art security system at one of the family's larger mansions. The family wanted all the bells and whistles, which is what they got and paid dearly for. Days after the system was operational and all the family treasures were moved into the mansion, the home was burglarized. It really was an amazing system because even though the thieves deactivated it, the backup cameras kept working. The thieves they caught in the act, it turned out, were two of the people who installed the system.
The family sued the security company and pulled all its money from the money manager. Furthermore, the family office executives and the family that was robbed regularly convey their opinions about both companies to all the professionals and wealthy individuals they meet.
So here's my recommendation: If you're going to make referrals, you'd better make sure the professional or firm you're recommending is exceptionally competent. You'd also better make sure their service meets the standards of the clients to whom you're giving the referral. Always keep in mind that if one of your referrals messes up, in the eyes of the client, it's all your fault.