What does it mean to be transparent when you are a financial planner? I believe it begins with the idea, that, like a physician, you will do no harm. That is first and foremost. You also seek to understand exactly where the pain points are with those who choose to listen to your advice. This is accomplished through discovery questions and a natural curiosity to learn and understand. Imagining yourself as a patient allows a planner to increase their effectiveness in communication, listening, and message clarity. Allowing that professional to use their expertise in arriving at a conclusion, a solution, to help solve your financial goals and adversity, in much the same way as a doctor would help a patient. Avoiding all of the jargon takes practice and a raised awareness when working with clients. The goal is that, over time, mutual trust in one other is formed.
Transparency is absolutely essential and is the first building block in all relationships, financial matters included. Transparency allows trust to be created and fosters more honest conversations when planning for tomorrow. Transparency naturally leads to and builds the foundation of trust. Trust doesn’t arrive overnight or by the wave of a magic wand. Trust takes time and originates from transparency. Trust makes it possible for you to be perfectly honest about identifying your financial and life goals, the obstacles that are keeping you from achieving them, and verbalizing what’s really important to you and those you care about.
Transparency with your advisor, and the financial firm he or she works, with is paramount. There can be a lot of agendas in play and often this can muddy the waters of transparency. One of the steps I’ve taken to increase our transparency as a company is the decision to drop my FINRA licenses and choosing to work solely in the advisory space by retaining my Series 65 license. Previously, I was registered both as a registered rep and an advisor. What this means in simple terms is that there were different suitability standards when serving clients based on acting as a registered rep and also an advisor. This led to different compensation methods for advice, as a registered rep earns commissions and an advisor is fee based. These different standards of suitability and compensation can create unnecessary conflicts of interest when serving others. This may lead to confusion and does not build the necessary trust that is required to achieve absolute transparency with clients.
It’s been my best practice for years as a planner to advise clients in an advisory capacity even though I was also a registered rep. Why? There is a higher duty of care, disclosures, and basic “doing good for others” when operating as an advisor when compared to the alternative. Dropping my licenses and the ability to act as a registered rep will have no impact on how we currently serve our clients planning needs. I see this as a definitive “line in the sand” which states where we stand on the advice we provide and a belief in advisory services.
We continue, as we always have, by putting our client’s interests first and acting in a fiduciary capacity. This fundamental principal of treating others as you would like to be treated seems to have been lost someone along the way in the financial landscape. This is evidenced by the fact that regulations need to be passed in order to serve client’s best interests. That’s ok, as we know exactly where we stand, the value of what we offer, and the positive impact our recommendations are having each day in our client’s lives. If this approach to planning and strategy resonates with you, or if you’d simply like to learn more, reach out via the links below as we’d be happy to chat.