The Most Expensive Advice

We sometimes meet with prospective clients who struggle with the idea of paying directly (via transparent fees) for un-conflicted financial advice. It is understandable and we have always structured our fees to be reasonable relative to  other alternatives. The most expensive commodity on the planet, however, is bad advice (or sales driven advice). Recovering financially from poor investments without any underlying long term strategy can be far more expensive than paying for comprehensive financial planning advice.

Of course, some of the problem can be traced directly to the opaque description used by many financial salespeople as “advisors.” To whom do these “advisors” owe a fiduciary duty? Who are they actually working for?  Brokers, insurance salespeople and others are agents for the companies that employ them. They owe allegiance to the company, not you.

Brand name financial services firms spend millions of marketing dollars each year to build top of mind awareness among investors. Many investors end up with less than good experiences with these firms for two primary reasons: first, the structure of these firms (shareholders, management, salespeople) is expensive; and two, these firms usually create AND sell their own proprietary investment products.

I recall early in our firms history we were working with two new clients, each with very different circumstances including age. One client was retired in her early 70’s and the other a young professional in his mid 30’s. They both had brought in brokerage account statements from a brand name national firm. Despite their different stations in life, both had been sold the same investment on the same date. What might have been appropriate for one surely was not for the other but they both now owned this investment. Their brokers were fulfilling their duty as employees of the company but not meeting their duty to the customer/client to deliver appropriate advice.

You can’t afford to make substantial missteps with your money. You can’t afford not to be protected with un-conflicted advice. Ready for a real conversation?

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