financial meeting

Content provided by Rusty Vanneman, CFA, CLS Chief Investment Officer

My parents were successful small-business owners.  Just months ago, they sold their last business and started traveling in their new Airstream trailer, and later this year, they’ll head to Alaska.  They’re having a blast. They definitely earned their leisure time, having worked hard and smart for so many years, providing excellent service to their customers, long-term jobs for many employees, and of course raising a family and building a nice life.

Needless to say, I’ve learned many business lessons from my parents, especially my father. While he was demanding of his employees to always raise their game, I never once heard him complain about a customer.  He was always available for his customers 24 hours a day, even on week-ends.  I recall numerous calls during dinner or on Sunday when somebody needed help, and my Dad took care of it.   Living in a small town helped, but I’m sure even if we lived in a larger community that he would have done the same.

“The customer always comes first.”  I don’t know how many times I heard my father say that.

As investment advisors and counselors, our mission is the same, but there is an important twist.

First (and quoting from the CFA Institute’s Code of Ethics), “[CFA] Members and Candidates have a duty of loyalty to their clients and must act with reasonable care and exercise prudent judgment. [CFA] Members and Candidates must act for the benefit of our clients and place their interests before our employer’s or their own interests.”  This duty of loyalty is not exclusive to CFA Members or Candidates either – an investment adviser has a fiduciary duty to always act in the best interest of his/her client.

Second, I believe we need to be there for our clients whenever they need us.  Service doesn’t stop at 5pm.  Technology has clearly helped in being able to provide better investment service and counseling – and to provide the flexibility to still maintain a healthy work-life balance.

But here’s the twist for financial professionals.  Many investors strongly desire to chase the “hottest” investment, or they want to abandon an asset class that “hasn’t worked” recently.  In short, these moves may not be appropriate given the investor’s over-all situation.  If that’s the case, it’s up to us as advisors to provide the necessary advice to keep investors on track and on plan.

Another common situation is that the single best way for many investors to reach their goals is to save more.  Many investors, however, would prefer the prospect of higher returns (and perhaps taking on inappropriate risks) instead of saving more.

These are just a few of the tough conversations that investment advisors must have. Investors can’t always get exactly what they think they want, and as advisors it’s up to us to steer them in the way that is appropriate and reasonable.  It’s how we earn our keep and, in the end, it provides the deep satisfaction of helping investors buy homes, pay for college educations, retire comfortably, build charities, and even buy Airstream trailers.