Guiding Principles Series – Principle 1 – “We pursue the best interests of our clients rather than our own.”
Welcome to the Ten Talents Guiding Principles series! This article dives into Guiding Principle #1, “We pursue the best interests of our clients rather than our own.” If you haven’t read the introduction to the Guiding Principle series, you can check it out here.
Client First Thinking
So what does it mean to pursue the best interests of clients rather than the advisor’s best interest? At a minimum, it means to take the time to learn about clients and ask questions to best understand their values and beliefs. By spending valuable hours getting to know clients and asking questions, we can provide the most appropriate and productive advice. Money relationships can be messy. Taking the time to understand a client’s money journey is a wonderful way to put the client first. The alternative would be to breeze through these conversations and “save time” by not intentionally learning more about the way clients think about their money.
For clients who hire Ten Talents to manage their investments for a percentage fee, an extremely tangible way we actively put a client’s best interest first is to not only provide recommendations that increase assets under management. Instead of putting the focus on gathering more assets or always increasing investment contributions, we may recommend paying off debt obligations instead. Or perhaps a client has charitable goals that would reduce the assets under management. Within the context of a financial plan, we want to encourage goals like debt reduction and charitable giving, even if that means we earn less revenue as a result of the recommendations. It’s the right thing to do.
Transparent Fee Conversations
Many families prefer to not have their investments managed for a percentage fee. The opportunity to put the client’s interest first in this situation is to offer alternative fee structures. For example, Ten Talents offers flat fee arrangements and annual planning fees billed monthly. These non-percentage fee structures aren’t meant to be a gimmick differentiation device; they are meant to put the client’s interest and client’s preference first.
Guiding Principle #1 is meant to center the planner/client relationship on the client and where they are at financially and personally. We want to put the client-family in the driver’s seat, sit on their side of the table, and actively seek their best interests with each conversation.
– Kaleb Paddock, CFP®
You can learn more about Ten Talents and Kaleb, a financial planner based in Parker, CO, here.
This is part 1 of 7 of the Ten Talents Guiding Principles series. If you haven’t read the introduction to the Guiding Principle series, you can check it out here.
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