As part of the community of fee-only financial advisors, we have struggled for years to help the public understand the difference between what we do and what brokerage house employees do (UBS, LPL Financial, Merrill Lynch, Goldman Sachs, bank employees, etc.). Those folks call themselves “Financial Advisor” and “Financial Planner”, too, so there is almost no distinction in title.
The only difference is who employs them. We fee-only financial advisors are held to a fiduciary standard, which is the highest standard of duty and care. We put the client’s needs before our own. We work for ourselves, are registered directly with the SEC (or state organizations), and have no product to sell. So what does that mean to the client?
Like I said, we’ve struggled to communicate it. I saw a funny video at an industry conference a few months ago where someone followed Green Bay Packers fans around in the parking lot before the game and asked them what a “fiduciary” was. Their responses were hilarious, if ridiculously inaccurate. One woman even refused to repeat the word, because she suspected it was dirty language!
So what do you do when something that separates you as a professional is a mystery to the people you serve? How do you tell potential clients the difference in objective advice they’ll receive from you versus the tainted recommendations they’ll receive from brokers who earn large commissions to sell particular funds, annuities or products?
Elliot S. Weissbluth, the CEO of HighTower Advisors, has done a remarkable job of simplifying the issue in the below animation with a very easy to understand metaphor. We hope you like it!