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I recently had the opportunity of being invited back to the South Carolina Business Review on South Carolina Public Radio to discuss this topic. Mike Switzer interviewed me on the importance of core values in investing. You can hear the interview by clicking here.
You’ve probably heard it said, “You’re the average of the five people you spend most of your time with.” The people around you matter. Especially the ones you are entrusting with your wealth and family.
We generally share common beliefs with those who are closest to us. If you’re married, think about where you met your spouse. Most of the time it isn’t random. Typically, there was a common bond, a shared activity, or a mutual friend who introduced you to each other.
Now, think about who you ask for recommendations. Typically, I start with my family, and then I may ask some friends on Facebook or some other social media platform.
Have you ever stopped to wonder, why we ask them for recommendations? It is likely that we know them, and we trust them.
What if your car mechanic gives you some recommendations, or perhaps your dentist or doctor? Depending on your relationship with such person and whether you trust them or not will determine whether you act upon their recommendation.
What about when it comes to money and working with a financial advisor who has recommendations. In order for the relationship to work best, there must be a common bond, but we think it goes beyond that. In fact, we think if you are going to work with a financial advisor, you must share three things with them.
You should share common values with your financial advisor.
We don’t mean that if the client is Presbyterian, they shouldn’t work with a Baptist financial advisor. Nor do we mean that you must line up exactly on the political spectrum with your advisor. However, we believe that the client’s core values should closely align with the one who is managing their wealth. Talking about money and families, and sometimes faith can be a very intimate conversation. We believe it best that the client and advisor align.
Simon Sinek says you should start by answering the question, “Why?” People like Martin Luther King Jr., Steve Jobs, and the Wright Brothers had little in common, but they all started with WHY. They realized that people won’t truly buy into a product, service, movement, or idea until they understand the WHY behind it.
I don’t have time to go into each one of them in this blog, but our core values are an acronym for the word, “CLIENT.” They are Compassion, Legacy, Integrity, Excellence, Nimbleness, and Truth. They answer the question of “Why we are in business.”
How to Know If You Share Common Values?
When we interview prospects to see if they would be a good fit, we are constantly processing whether we can trust them and if they are understanding the basic tenants of our investment philosophy. At the same time, we are hoping they are listening and asking good questions to decide whether they can trust us with their wealth and whether our process makes sense. If we get any sense the prospect isn’t going to be a good fit in the long run, we’ll probably walk away. We think of this interview process as the dating phase. If you aren’t careful, and just focus on the assets the prospect has, you could end up needing a “financial divorce” down the road, which could prove inefficient and costly.
Intelligent Investing has found that the clients we most enjoy working with are those who:
- Share our core values and investment philosophy.
- Understand our process and how we integrate their financial goals, plan, and risk.
- Have wealth we can manage. We are after all a boutique wealth management firm.
Notice the order of those three. Sharing our core values and philosophy is much more important than whether the client has a lot of assets we can manage.
You should share an unbreakable trust with your financial advisor.
If you see headlines about fraud or a financial institution being sued because of misappropriation of funds, and you say to yourself, “I wonder if my financial advisor would ever do something like this” it is time to pull the plug.
At Intelligent Investing, speaking the truth in love is one of our core values. Speaking the truth in love means that sometimes we have to have a difficult conversation with a client. Perhaps they are spending too much…perhaps they are being taken advantage of by their children. Whatever the issue, we must have the ability to communicate with them…even though at the time they may not want to hear it.
Wars and divorces begin with a lack of trust. If you aren’t comfortable with your dentist or doctor, then pick another one. If you aren’t sure your financial advisor has your best interests in mind as they manage your wealth, then pick another advisor. Life’s too short to miss out on a great experience you could be getting from another professional.
We believe that technique and technology are important, but trust is of utmost importance.
You should share a common financial interest with your financial advisor.
I chose this profession because it afforded me the opportunity to build my own family’s wealth by helping other people build (and protect) theirs.
Intelligent Investing’s fee is based on a percentage of the assets we manage. We are an independent 100% fee-only fiduciaries who must always act in the best interest of our clients. Intelligent Investing never sells any products (such as annuities or insurance), nor makes any money off of commissions, nor are paid by anyone other than our clients. We believe this creates perfect alignment of interests between us and our clients. When our clients prosper, then we prosper. When our client’s suffer due to inevitable and temporary declines, then we suffer.
So, in conclusion, the three things we think clients should share with their financial advisor are:
- Common Values
- Unbreakable Trust
- Financial Interests
If you aren’t working with a financial advisor who shares these three things with you, we’d love to have a quick coffee and introduce ourselves. We’d be happy to have a short conversation with you to see if we can serve you and your family. The families we can serve best have between $500k to $5M of investable assets. Click here to learn more about our firm, or click the link below to schedule a stress-free call or meeting.