As my understanding of how my industry has operated in the past increases, I grow uncomfortable with the status quo. This entire industry has long been based on one party having all the information and other parties paying fees to get access to that information. That scenario was completely understandable during the founding of and growth of the modern financial enterprise. Information transfer was not as seamless as it is now and there was an immense amount of work required to gather that information.
Today may be a new day and age, yet most financial advisor/client relationships are still built on the advisor having all the info and the client being held to a certain level of required trust. Many clients are operating on the assumption that their advisor will give them the necessary information to make decisions. So, back to my title question, is the transparency regarding financial information given or requested? In this financial relationship, is transparency freely given by the advisor who understands instinctively the desire to see the details in order to make an informed decision? As a client, do you feel you have to request details that are needed to be fully informed? Try looking at it like this next time you meet with your advisor; can you answer the following questions without having to ask:
1) Do I understand why each change recommended benefits me?
2) Is it clear how my personal plan was considered in the recommendation?
3) Do I know how or if my fees will change because of this recommendation?
4) What is the long term impact of this decision?
Was it made clear to you why each change or recommendation made since your last meeting is in your best interest? Was it explained how your personal plan will benefit and how your expenses will change? Is it obvious how your advisor stands to benefit from the decision? These are all material questions and details that should be communicated with you without having to request the transparency. If you are concerned that you are having to request transparency, have that discussion with your advisor. Your advisor may be so far in the weeds working for you that he or she forgets to communicate properly. If, however, you have that discussion and are still concerned, give us a call for a second look.
Caleb Bagwell/Employee Education Specialist
John Maxwell Certified Leadership Coach
Grinkmeyer Leonard Financial
Toll-Free: 866.695.5162 / Office: 205.970.9088
1950 Stonegate Drive / Suite 275 / Birmingham, AL 35242
Securities and advisory services offered through Commonwealth Financial Network, Member www.FINRA.org/www.SIPC.org, a Registered Investment Adviser. This communication strictly intended for individuals residing in the states of AL, FL, GA, KY, LA, MD, MS, OK, PA, SC, TN, TX. No offers may be made or accepted from any resident outside these states due to various state regulations and registration requirements regarding investment products and services.