Road To Independence

I heard an advertisement recently for a financial services firm that went something like this, “Don’t work for your 401(k); let your 401(k) work for you. We can show you how”. What exactly does that mean? This is just one example of the “noise” out there. The dictionary defines noise as, “a loud, surprising, irritating, or unwanted sound.” The plethora of meaningless advertising in the marketplace serves to create confusion in the minds of clients and makes it difficult for them to choose an advisor or firm.

We must possess integrity AND competence. Both are vital. An advisor could be trustworthy but incompetent or extremely competent but unethical. People who engender trust possess both qualities. A prospective client must develop a certain level of trust in us before they will allow us to take the wheel.
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In my last blog I wrote about the feeling of being overwhelmed by all of the tasks set before me. As we all know, if there’s one thing that’s constant, it’s change. What a difference a week can make. You see, even though I still have to wear a lot of different hats, I can now see light at the end of the tunnel. Since my last posting, a new path has opened before me. A path of opportunity and it came along at just the right time. Let me explain.
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I find myself swimming in a sea of complexity; much of it is my own doing. As the initial momentum of starting a business has waned a bit, I have come to the realization that I need to revise my strategic business plan. I’m reminded of the phrase which goes something like this, “It’s not enough to do things right but to do the right things.” What I do, I do well, but I’ve not been doing enough of the right things. It’s time to reassess what’s important to the business and do those things well.
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We had some good discussions in this space over the past few weeks about the frequency of the advisor fee deduction. This week I’d like to focus on the source and structure of our fees. Where do you derive your fees from and how do you structure them? For instance, if you do financial planning, do you charge a fee for this service or not? If you do charge, what is the range of your fee and if you don’t charge, why not? If you manage client assets, how do you charge for this? Do you charge a percent of assets, commissions, or maybe a flat rate based on the account or relationship size? Here’s how I am doing this.
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