Traverse City Record-Eagle


March 2, 2014

Jason Tank: Advisers are worth time, money

TRAVERSE CITY — Once in a while I try to take a big step back to gain a clearer picture of the landscape.

Today, I am departing from my usual focus on the investment markets or financial planning topics. Instead, I’d like to discuss what I think makes a financial adviser worth your business and, ultimately, your loyalty.

For many, the world of finance is about as easy to understand as reading calligraphy. It takes me great effort to translate financial jargon into accessible, everyday language. I am sure my attempts fail too often. I am also sure a real skeptic could convincingly argue that the shrouding of basic financial concepts under layers of complexity mainly work to validate advisory fees.

It is not comfortable being in an “asymmetric” relationship. We’ve all experienced these in our lives. I personally have very little clue about what my mechanic, furnace guy or my doctor is telling me most of the time. For me, and I am sure others, I think accepting professional advice just boils down to a matter of trust. Basically, trust is that forest I notice when I finally step far enough back from the collection of trees that have grown too thick in the financial industry.

What characteristics are most important for a financial professional to build that trust? I’ll highlight three traits that I believe will at least point you in the right direction. In a matter of full disclosure, my firm was built on these traits, but we absolutely are not the only firm who has them, even in our own backyard.

First, I’ve long believed clients should strongly consider professionals who work exclusively as “fee-only” advisers. This means they won’t sell you any financial products and they aren’t incentivized by earning commissions. Being “fee-only” means the only compensation they earn is paid directly by the client. I’ve always argued the best way to ensure you’ll be served is to be the one who pays the invoice.

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