Some Financial Advisors Ahead of the Curve

Over the years, I’ve met dozens of financial advisors in the San Francisco Bay Area. Most are just fine. They crunch the numbers and work the charts, and when markets do well, they can do no wrong. The true test of their relationship with their clients comes when times are bad -  When fear is high, loss is painful and trust is compromised.

Some financial advisors understand these pendulum swings in mood and confidence and use the undulations to think outside the box. I like to think of these firms who understand the soft side of financial planning as the harbingers of how business will be done in the future.

For example, Paul King, president of King Wealth Planning in Cupertino CA has been presenting community programs to educate and empower people , and especially women, about how to lead an enlightened financial life.  The cost of these programs comes right off King’s bottom line. But the good will it generates can’t be measured in dollars. It is measured in trust.

Can the firm point to a direct correlation between what the programs cost them and what they receive in return? Not yet, but I’m hoping the coming years will repay the firm with a cornucopia of business because of what they were willing to provide at the front end.

Another creative soft side approach is that followed by Lasecke Weil LLC Wealth Advisory Group, headed by Tracy Lasecke and Curt Weil. They know that baby boomers and their parents often find it difficult to begin the crucial conversations they need to have about planning. They also believe that training their own team in how to be more sensitive to intergenerational issues makes it easier for the planning process itself to begin. It's more about hearts than charts.

Learn more about the soft side of financial planning: 

http://www.financialconversationswithheart.com

http://www.kingwealth.com.

http://www.laseckeweil.com

Financial Advisors and the F Word

Oh, it's not what you're thinking. The F word I'm thinking about is fiduciary, meaning that your financial advisor is required to put your best interests as the client first, no matter what.

That might seems obvious, but according to a survey by Bloomberg Business, the majority of Americans mistakenly believe that insurance agents, stockbrokers and people calling themselves financial advisors are fiduciaries.www.tinyurl.com/2777xyl

The survey showed that thirty-four percent of investors believe that financial advice is the primary service offered by stockbrokers, even though their main job is to buy and sell stocks. The 'advice' is free; the broker's payback is the commission on the trade he/she makes for you.

Ninety-three percent of respondents said brokers should be required to disclose conflicts of interests in advance, such as cash payments or vacation trips they would receive from a mutual-fund company in exchange for selling its product. Should be required? Do investors ever think about or ask if a conflict of interest exists?

Sixty percent of respondents said they thought insurance agents had to uphold a fiduciary duty. Alas, not true. They are required to explain the policy they are selling, not point out the hidden costs. Who can blame agents for wanting to sell an annuity when the up front commission rate is 18%?

The SEC (Securities and Exchange Commission) may take up the full disclosure issue this year for everyone selling financial products or advice. On the other hand, they may not. They've been planning to do that for many years. Just never got around to it.