I met with a long-time friend last week. He’s ready to sign up as a client. Before I left our meeting he said, “Just don’t cheat me.” Okay, I’m paraphrasing. He used more colorful language, but it spoke to the immense trust he’s putting in me. He trusts me to guide him through the major financial decisions that come with his retirement. I was proud to reassure him that I will always act in his best interest.

That got me thinking, if I were going to try to cheat him (overcharge him, neglect his accounts, or otherwise give bad advice), I would have the wrong business model. Neither my wealth management agreement nor the investments I recommend lock my clients’ money up. My quarterly reports show my clients exactly what they pay me every quarter. If they don’t like what I’m doing, they can just walk away at any time. That’s the wrong business model for a cheat.

Incentives matter. Are you working with an advisor who gets paid a big up-front fee (commission) or invests you in products that lock you up (insurance products and annuities, in particular)? I’m not saying your advisor is a cheat, but the incentives aren’t in the right place. Commission-based sales professionals (sometimes still called advisors) are incentivized to give more attention to the next new client or new money because that’s how they get paid. I’m incentivized to keep my clients happy. I like it this way.

About the Author:


John has more than ten years experience as an Investment Advisor. He focuses on devising and maintaining portfolios that meet individuals’ needs, investment research, and investment strategy. John has been recognized as a “FIVE STAR wealth manager” by Twin Cities Business Magazine 2016-2022. He is a CFA charterholder and CERTIFIED FINANCIAL PLANNER™ Professional.

Legal Disclaimer: These posts do not constitute an offer or recommendation to buy or sell any securities or instruments or to participate in any particular investment or trading strategy. They are for informational purposes only. CTW gathers its data from sources it considers reliable. However, CTW makes no express or implied warranties regarding the accuracy of this information or any opinions expressed by the author and may update or change them without prior notification.