I’m very tuned into how different places treat their customers. My company focuses on helping organizations create experiences that lead to their customers becoming marketing agents for them. This is my line of work, so I have certain expectations from my advisors in this regard.
In the ’80s, I started with a financial advisor at a big brokerage house. I was referred by people where I worked at the time, and I was with him for about 20 years. It was a good relationship. Then he retired, and I moved to an independent firm where I’d picked up some inherited accounts when a relative passed away. That was a pretty terrible experience. The new advisor charged a percentage of assets under management, but also charged for when he put you in something new. So, he was incentivized to sell different investment instruments. My first advisor did the same thing, but at least he was honest about it. I find that when advisors make money on transaction fees it causes a conflict of interest.
Some of the things he suggested were very unusual. For example, an oil mining group—investments around funding the discovery of oil. The idea was you get a big payout if they hit oil. But it seemed to me to be outside of a risk tolerance I was comfortable with. I talked to other people I knew, and they said the same thing—Why would you want to invest in oil? It felt really odd.
Then I told him I was moving all my money to another advisory group. As soon as I decided to do that, he turned very antagonistic. Jekyll and Hyde. I was the enemy. He wanted to start charging me hourly rate consulting fees. He completely alienated me.
My new advisors use Charles Schwab or Fidelity to do their trades. They charge a percentage of AUM and build a strategy for you. I met a couple of their principals through a group for business owners I’m involved in. I’d known them for two or three years. I run into a lot of financial advisors who are pushy and sales-oriented. These people were different. Usually the first meeting I have with an advisor, they want to know if I’m interested in moving my money. But these people just told me how they worked and helped me understand more about things going on in the market without any questions about switching my account. We got together for coffee a few times, and I would just bring up questions. They were very responsive.
Now that I’m a client, we meet twice a year at minimum. But I can see them anytime I want. We usually spend around two hours together, so it’s quite in-depth—a broad discussion of what’s going on in different markets, and a look at the allocation of my assets measured against return and risk. We focus a lot on my risk tolerance—do I want higher growth and higher risk or something more conservative. And they’re very open to listening to what I want to accomplish and whether we’re on the right track to do that. It’s all about managing an overall strategy tailored to my needs versus trying to grab this stock and make money on it right now.
They don’t have a lot of big schmoozing parties where they invite their clients. But they do have quarterly cocktail parties where you can hear a speaker talk about a topic for maybe 45 minutes in a casual setting. I like these gatherings a lot. They’re held at different places. A recent one was at a country club with a speaker who discussed the real estate market and real estate investments. I enjoy getting the opportunity to meet their other clients, who are great people.