“The real value of an advisor,” said Richard Sincere, is having the ability to answer the question, “’How do I give this client the ability to live a happy life?’”
Yes, providing investment performance is important, but if “that’s the only thing that an advisor is doing for them, they’re missing the point.” The main driver for advisors, especially fee-only ones, should be “getting to know your client and plan around what your client needs, helping them get a better life from a tax standpoint, for planning for retirement and education, and giving permission for them to look at their life and say, ‘You can spend more or spend less — but you have the ability to live a full life.’”
If you don’t know Sincere, then you’re probably not a member of NAPFA, the fee-only advisor group whose conference exhibit halls always feature a Sincere & Co. booth. If you think he’s just one more advocate among the bevy of marketing partners for mutual fund companies whose booths fill fee-only and other RIA advisor meetings, then you don’t understand how his company consistently represents undiscovered money managers whose interesting stories are only matched by their performance.
Owing to his background in banking and RIA custodial services (Citicorp and Fidelity), Sincere understands what advisors are looking for when they’re looking to outsource their investment management responsibilities.
With his understated but significant charitable work and his strict ethics, matched by an easy-going Midwestern mien, Sincere is also that most rare of marketing experts: like a good glue, he connects the right people to each other, regardless of whether such networking connections benefit him directly, though it does benefit the entire advisor community.
So what do advisors need now, and how well is the advisor ecosphere meeting those needs? Sincere said that “20 years ago, the mutual fund industry didn’t know what a fee advisor was.” Now, “there’s a whole group of technology firms that need to be introduced to the independent fee advisor.”
As an advocate for the mutual fund companies he represents at Sincere & Co., Sincere admitted that these are “not easy times for anybody in active management.” But for advisors, it’s also a tough time owing to the environment in which we live in this country. “Clients are concerned even if their portfolios are going up,” he said, and he worries that “the animosity from the presidential campaigns is dripping over” into the broader culture.
For investment company distributors, he also worries that “they have no desire for a relationship” with their advisor customers, “which is weird, because the independent RIA industry is based on relationships.” He counsels those distributors, and anyone else looking for a foothold in the advisor space, to “put yourself in the shoes of a traditional fee advisor: It’s all about getting to know your clients and then offering sage advice.”
Among advisors, he said, “the real leaders of the industry” have always “wanted to make a difference” in their clients’ lives. He said the industry must teach the next generation of advisors to embrace “those kinds of internal drivers,” which as more and more people become fee advisors, partly due to the Department of Labor fiduciary rule, is “going to be a challenge. It’s more than just getting the best performance of the day but rather making a difference in people’s lives and giving back to society.”
The DOL rule is an important change, but just because someone moves from a brokerage model to a fee-based model “doesn’t mean that their personality is going to be different, that they’ve internalized how to help a client have a better life,” he said. Sincere said he continues to be a “a huge NAPFA supporter, because NAPFA came in and said, ‘How do we concentrate on making sure the client is well taken care of?’” The members of the fee-only group are also “much more entrepreneurial,and intellectually curious,” always looking to find “what’s out there that would be better for our clients?’”
He concluded by arguing that “fee structure really impacts how people behave; if you have the client pay you, it allows you to be much more objective.”
Himself heavily involved in philanthropic activities, especially with the Tel Aviv University and the University of Wisconsin, Sincere said that despite his concerns, he’s optimistic about the future. “I meet people who are so entrepreneurial with their philanthropy — so targeted with how they give — there are so many great things going on that will be good for society.”