Sometimes, in our constant drive for ever better performance, we lose sight of what’s important. Numbers are easy to comprehend: If the high school’s senior class average SAT score was higher than last year, the principal must be doing a good job. The difference between an Olympic gold medal sprinter’s time and silver medalist’s time might be in hundredths of seconds, but the gold medalist could end up earning hundreds of thousands of dollars more in endorsements for those few hundredths of a second.
When it comes to hiring professionals, numbers are important, but they aren’t the whole story. We want our veterinarians to care about our pets and our mechanics to explain why there’s puddles of oil under our cars when there weren’t any puddles before. We want to participate in what they do for us and, at the end, to feel comfortable with the process.
Above all, we want the trust we extend to be validated. There are few feelings worse than being betrayed.
Wealth management is no different. Yes, low fees and strong risk-adjusted after-tax performance are important. Index funds are attractive because they have low fees and, other than a minimal management fee, you’re likely to get performance that matches the index. Index funds are easy to measure and there’s a circular reasoning about why to buy them. Because an index is the benchmark for performance of an index fund, the fund must be satisfactory. That doesn’t answer the real issue, which is whether the fund and index is right for you.
The work product of a wealth adviser is achieving financial goals. Performance and market knowledge are only a start. What we also need to achieve our goals are appropriate strategies, consistency, and (usually) time. Those qualities demand engaging in a partnership relationship with your adviser instead of a transaction, and partnerships require trust. If you don’t trust your adviser, you may not stick with a program when abandoning it will be disastrous.
Trust, as we all know, is earned slowly, and lost easily. Your adviser needs to be accessible and his or her motives need to be transparent. Ideally, you should understand the adviser’s process so well that you can anticipate what he or she will recommend if the market makes any unanticipated moves. Your adviser should be a coach who leads you to the win, but not a nag because naggers are eventually shut out.
The real measure of a wealth adviser is how comfortable their clients are with the service they get. It can be measured by how long those clients stick around. Great advisers have client relationships that span decades and generations of family members, or are beginning to earn that sort of loyalty. Their clients could have moved their accounts at any time, but they chose to stay. Trust is earned, tested and confirmed.
To those professionals who are in my business or in any other occupation, if that’s the service you provide your clients, my coffee cup is raised to you. You’re doing a great job.
Evan R. Guido is the founder of Aksala Wealth Advisors LLC, a 2018 Forbes Next-Gen Advisors List Member, and Financial Professional at Avantax Investment ServicesSM. Evan heads a team of retirement transition strategists for clients who consider themselves the “Millionaire Next Door.” He can be reached at 941-500-5122 or email@example.com. Read more of his insights at heraldtribune.com/business. Securities offered through Avantax Investment ServicesSM, member FINRA, SIPC. Investment advisory services offered through Avantax Advisory ServicesSM, insurance services offered through an Avantax affiliated insurance agency. 8225 Natures Way Suite 119, Lakewood Ranch, FL 34202.
This article originally appeared on Sarasota Herald-Tribune: RETIRE ON TRACK: The real measure of your wealth adviser