Welcome to the Weekly SUMmary - 01/15/2021
There's a term that has been thrown around a lot in the last few years. Fiduciary. Mirriam-Webster describes this as relating to trust. The noun is more difficult to describe, but feel free to visit this link to read more: https://www.merriam-webster.com/dictionary/fiduciary In the financial services industry, it has been interpreted as Best Interest, meaning that a fiduciary is beholden to do what is in Your Best Interest.
I began this blog by wanting to talk about unbiased advice. With assistance and edits from my incomparable wife, we landed on a different interpretation. I think your advisory team should have a bias toward doing what is in your best interest. That said, how is one to know that someone is doing what is in your best interest if they are only incentivized by selling you product? If that's the incentive, then wouldn't one also be able to assume that they may be incentivized to use products that are going to compensate more?
Let's take a step back. What is Financial Planning?
Not many will like this answer, but it depends on each individual and their situation. It also depends on how much information is provided for the development of the plan. In addition, it depends on how comfortable each individual is on the planner retrieving, receiving, assisting with aspects of their financial lives.
The key is to research without bias. Provide objective, data driven, research based advice and recommendations that fit a client's individual needs and desires.
I think the way to do this is to remove the sales process from financial planning. Separate that service from other products offered. What if you pay a separate fee for such advice. Is that worth $1,000, $5,000, $10,000? Everyone has a different idea. Consider all options though. You can ask any financial related question and be provided information to make an informed decision. That does come with a cost because a financial advisor's time and expertise is necessary to research and provide information to make informed decisions.
If you have someone whom you trust to provide that advice and trust they have done the research, great! A caveat... I would recommend not doing what the Jones' did (keeping up with the Jones') as what works for them may not work for you.
At my business, SUM Financial Services Group, I continue to expand my offerings when it comes to financial planning. The ultimate goal would be to become my client's "chief financial officer" (CFO). Obviously, if the client is an employer (owns their own business), someone within the business should officially be acting in the CFO role for that business.
What I would like to be is not an employee, not a salesperson, but a partner in providing each client and their family with a better financial future.
Because I understand how many options there are and complex financial transactions can be, I have the ability to provide many products and services for those clients that would prefer assistance with that.
That said, I also provide a lot of information for free. See our monthly events here (minus December): https://www.sumfsg.com/events
My next webinar will be providing information on Pre-Retirement Decisions. Register here: https://www.sumfsg.com/events/webinar-series-january-2021-pre-retirement-decisions
To discuss what your experience working with me would look and feel like, feel free to call, email, or sign up for an appointment at the bottom of this page.
This blog is for educational purposes only and should not be considered official recommendations or advice. You should consult with a professional relating to your situation. (01/21)