Financially Speaking Podcast

The Imaginary Line

Published on November 11, 2013

When I am interviewed by a potential new client, we talk about how I make decisions, think and work.  During the discussion, I always talk about The Imaginary Line.
I explain that there is this imaginary line, and on one side is the financial world; all the investment companies, mutual funds, insurance companies, banks and financial institutions.  It is filled with investment products and services-so many, in fact, that you simply can keep tract of it all.
On the other side of the imaginary line, are my client and me.  My job is to help my client make good decisions and to make the best choices for them from all those products and services.   My job is to make recommendation which are in the best interest of my client.
The point is that the sheer number of financial decisions is overwhelming for clients.  They need my help.  The second point is that clients need objective advice.  They want my loyalty to them. 
It became apparent to me many years ago that I couldn’t work for a financial institution and be loyal to my client.  In order to be objective and unbiased, my client needed to be my ‘employer’ by paying a fee.  It means that I should be paid only from my client-no commissions or remuneration from someone which might influence my recommendations.  
This is something I am passionate about. 
In the beginning of my financial career, I lived by selling financial products for a commission.  It was about selling lots of product and make lots of commissions to get awards and accolades from other people selling lots of product.  But getting awards for selling lots of stuff is not the same as being loyal to your client’s best interest.
That is why I am a fiduciary.  It has been a part of me for a very long time.

Tags: financial advice; fiduciary

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