Putting Clients First - Always!

Financial advisors often talk about putting clients first, but what does that really mean? First of all, the term "financial advisor" can be used by a wide variety of professionals - ranging from insurance agents to investment advisors. The main difference between many professionals is the way they are compensated. Older firms tended to pay their employees by he amount of "production" they provided by selling products such as life insurance, variable annuities, and mutual funds. Investment advisory firms practices tend to pay their employees based on the level of assets they manage for their clients. Some innovative firms are pricing their services similar to other home accounts - with a monthly subscription plan. The reason why it matters which way a financial advisor is paid is because it makes a HUGE difference in their incentives to help their clients. Here is a personal story.

Running a small business is difficult (in the best of times) and next to impossible in the challenging environment that has been COVID-19. As a self described "data junkie," one of my worst business decisions has been over spending on data and software to serve my clients in a better (IMHO) and more personal way than the "big box" investment shops. People come to me because when they call, text, or email, they get a quick response from the decision maker who can help solve their problem without any unnecessary delay or bureaucracy. I cherish that personal connection that helps me craft a financial plan and investment strategy that helps them maximize their probability of success.

Last year - at about this time - I had to swallow my pride and put my clients first while making an abrupt lifestyle change for myself. Software and living expenses continued to climb while my firm revenue was taking a hit from a difficult year in the markets. Housing choices in Granby Connecticut were very limited and I heard so many stories about the bidding wars eating all the housing inventory. The prospect of spending the winter on my small sailboat and working out of a coffee shop seemed a bit too cold for my blood. The only logical choice was for me to pack all my worldly possessions into storage and rent my childhood room from my little sister in West Hartford. This allowed me to regain my financial footing while continuing to serve my wonderful clients.

When life sends us lemons, it is often best to make lemonade. While the cliches can go on forever, the main lesson I learned is that our individual success can be measured in countless ways. Comparing ourselves to "The Joneses" is a surefire course to a disappointing life.