Financial advisors, according to a March, 2019 survey by the Journal of Financial Planning, get no respect. Rodney (“no respect”) Dangerfield would have had a heyday with this survey, had he chosen the financial services industry. The survey results are disheartening for many of us, but there is much to be gained from a deep dive into the data.
A disgustingly low 2% of surveyed people claimed to trust financial industry professionals. Given slightly more latitude, 15% admitted to trusting financial professionals “a little.” We remain unimpressed with these results, so we decided to look into the reasons why so little faith is evident in our industry. As with so many occupations, this seems to be a case of a minority of practitioners making it more difficult for all of us.
There is an age-old joke that says, “95% of all lawyers give the rest of them a bad name.” We believe that the situation in the financial services industry is more or less the reverse of that. A few truly unscrupulous advisors ruin the image of the many good practitioners.
Potential clients of financial advisors are fortunate to have a method by which they are able to ascertain the trustworthiness of their potential advisors. Thanks to the fiduciary rule, clients are able to know whether their advisor is legally, morally, and ethically required to place the interests of the client ahead of the interests of the advisor. Simply put, every advisor is either a fiduciary or not, and clients are allowed (and encouraged) to ask. In fact, we believe these potential clients are obligated (to themselves and to their families) to ask. A non-answer from an advisor should be taken as a resounding, “No.”
Over time there have been too many rogue financial “advisors;” we believe that the term “ financial advisor” is used entirely too generously. Insurance salespeople, brokers, and various other transaction-based activities do not qualify as true financial advising. 93% of Americans surveyed believe that the advisor’s interests should be second to their own. Yet only 50% of clients know whether their advisor is a fiduciary. This disconnect is upsetting, because it is critical to the ongoing success of the relationship.
Aretha Franklin was not only entertaining, but very clear about her desire for R-E-S-P-E-C-T. She earned it; she got it. At Van Wie Financial, we are doing our level best to earn it. Today there are many indicators available to investors seeking out reliable advisors. Look for fee-only fiduciary advisors, preferably holding the Certified Financial Planner™ (CFP®) designation, and doing business as a Registered Investment Advisor, or RIA. Your odds of success will be excellent.
Van Wie Financial is fee-only. For a reason.
