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Financial Planning > Trusts and Estates > Trust Planning

Trust is not always earned

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Here’s what you don’t often hear an advisor tell a client: “It’s irrelevant whether you trust me or not”.

But then again Marty Kurtz, CFP and founder of The Planning Center in Moline, Ill., is known for speaking his mind in clear and succinct language, and a booming voice to boot. He can rattle some with his bluntness and passion and yet, many come around to understanding that in Kurtz’s world, ethical treatment of clients is pretty straightforward.

He began his career in life insurance and transitioned to financial planning in the early 1980s, eventually opening up his own firm in 1998. In addition to having earned “top advisor” awards over the years, he was appointed to the CFP Board of Professional Review, a group which he later chaired. He was also elected to the board of the Financial Planning Association and served as its president in 2011.

What’s interesting about his life path is that Kurtz remembers his life insurance days as a time to “sell to your friends and neighbors”. The personal relationship helped forge the trust between client and agent, with no real thought as to whether this made the situation too cozy. Today, Kurtz reminds advisors that you have to be the planner, not the friend, especially when it comes to difficult talks about money. 

From his perspective, there are several elements that are vital to developing successful connections with clients. When he served on the CFP Board of Professional Review, he focused on disciplinary and ethics cases involving CFP professionals. He believes that much of what he saw contributed to raising the fiduciary conversation to the level it is today. “Almost all the cases I encountered were about fairness and how the advisor didn’t adequately communicate conflicts of interest and the like to the client,” he notes.

Kurtz said that trust is at the basis of today’s advisor-client relationship. However, he said his job as an advisor is to be trustworthy, but not to immediately generate trust–a nuance lost on some. “Trust is not necessarily earned, it’s a gift” he said. “It’s not about whether you trust me as an advisor. I have a job to do and I must do it in the most trustworthy manner possible.”

He shares a story of a client whose wife rarely came to appointments while he was alive. The gentleman passed away in his sleep and the wife met with Kurtz soon after.  “She asked me ‘what do I need to do?’ I said nothing. Everything is all set.  She was so relieved,” he recalls. “Later, she asked why she should trust me. I told her she didn’t have to…our calling was to do the same work no matter if she trusted us or not.”

Kurtz will be the first to admit he hasn’t had the answers all along and that for him, trust and an advisor’s fiduciary responsibility has been a “30 year discussion”. For him, disclosing isn’t enough. With every client, there are conflicts of interest that must be shared and addressed. His strategy is to acknowledge the conflict and then focus on how to reduce the risk of the conflict by either avoiding it, or tempering it. From there, the advisor and client must work together on absorbing the conflict so it doesn’t become an ongoing issue.

Along these lines, Kurtz’s firm has implemented innovative pricing structures to avoid the inherent conflicts that arise from fees that are solely based on AUM. Under the latter scenario, advisors can be challenged to lower assets and may hesitate to counsel clients to reduce their investments to pay down a large expense (e.g., a mortgage or a student loan) because it could affect their fees. Kurtz and The Planning Center created a fee model based on a combination of net worth and income to avoid the normal pitfalls.

Kurtz’s views on fees, ethics, disclosure and trust are not just part of a company boilerplate. It’s a philosophy and process that has attracted employees likes “moths to a light bulb” he says. “I have one advisor who is the son of a client and recognized what we do is different and wanted to be a part of our team. I have two brothers who work here who also became intrigued by the process because their parents are clients. This is a wonderful testament to our approach and work ethic.”  

His long-term goal is to create a business model that easily passes on to generations of advisors. “It’s a progressive idea but one that is long overdue,” he says.

Trust that Marty Kurtz knows what he’s talking about.



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