Meeting in Huntington Beach, California, a Southern California surf city, Securities America reps enjoyed an unusual departure from the typically more scripted general sessions, often led by former politicians, generals or athletic coaches.
Instead, Chip Roame, managing principal of Tiburon Strategic Advisors, moderated a panel of four consumers in their 50s and 60s whom he had not met until they walked onto the stage.
Roame began the session by explaining that these four people, while not constituting a perfect statistically representative sample of consumer/investor opinion on financial advisors, would certainly counter FA expectations and, thus, prove enlightening.
And so Securities America reps were introduced to Tom, Bill, Judy and John, none of whom were clients of the Securities America reps. (Securities America is part of the Ameriprise Financial broker/dealer network.)
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Tom is every advisor’s bread-and-butter client. He’s been with his Morgan Stanley Smith Barney advisor for 25 years, including through various transitions. (When they started out, his advisor was at Kidder Peabody.)
The CFO of a construction company, Tom initially was looking for an advisor to take over management of his company’s financial plan, which Bank of America’s trust department had been overseeing and whose fees he found excessive.
How did he choose his advisor? “I knew attorneys, I knew CPAs,” Tom remarked, echoing a common panel theme that consumers want to go to advisors they can trust, and find such advisors through referrals from friends and acquaintances–most especially from their attorneys and CPAs. (In Tom’s case, it was his attorney’s recommendation that cinched the deal.)
Tom gave his advisor half the company’s assets initially, then the other half after observing him for a year. Three years later, Tom moved his personal assets to this advisor, whom he now describes as “a very close personal friend.”
Tom’s loyalty to his advisor was evident throughout the hour-long panel. If his broker switched firms, Tom would move with him. If his broker were to die or retire, Tom had great faith in the rest of his advisor’s team, which included the advisor’s siblings and children.
Bottom line: It was Tom’s relationship with his advisor that seemed paramount. Tom sees his advisor weekly, and noted the “social basis” of their relationship.
The second panelist, Bill, was Tom’s opposite on the spectrum of hot prospects. A successful Orange County dentist, Bill is a confirmed, lifelong do-it-yourself investor. That investing track commenced in dental school, when insurance salesmen tried selling whole life products to dental students.