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Portfolio > Portfolio Construction

They're Buying Advice, Not a Portfolio

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People express their trust in you, or lack thereof, in different ways. This week brought with it some interesting and encouraging developments. I had a meeting with a client who informed me that he would call me or his CPA whenever faced with a financial decision. He didn’t say the words, “I trust you” but his intent was clear. I called another client after the 387 point drop in the DJIA to see how he was doing. This particular client is approaching retirement and I expected him to be a little concerned. To my surprise he wasn’t and in fact said, “I trust you completely. Do whatever you think is best.” Still another client said, “I trust you 100%.” These are the things that inspire me and are the reasons I do what I do. The common thread between each of these clients is that they didn’t buy a portfolio or a financial plan, they bought advice.

There is such an abundance of information out there that it is reshaping the role of the advisor. Before the Internet age was in full swing, those in the industry had a corner on much of this information. Now that it is so abundant and can be accessed so easily, there is a real need for advisors who will help the client make sense of it all. I view this to be my role, pure and simple. Not everyone will agree, however.

Many advisors are stuck in the product sales mode and are always on the prowl for their next score. But I believe the tide is changing. Clients are growing increasingly aware of this mentality and are becoming more and more suspicious. Many companies have seen this development, too, and have attempted to change.

It’s interesting to me how a company will adopt certain phrases like Trusted Advisor or Total Wealth Management but not change the culture of their organization. Without a fundamental shift in philosophy, the phrase is little more than a hollow marketing slogan.

It’s time we realize that clients are the reason we exist and without them we would not be in business. The philosophy is simple, “treat others as you would like to be treated.” Gaining trust is everything.

What do you think? Agree or disagree?

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