Finger Licking GoodSubmitted by Fountain Financial Associates | Financial Advisors on June 7th, 2018
Posted on May 25, 2018 by Vinton Fountain
Some of you may have been reading and listening to recent financial news around the subject of corporate penalties and fines for fraudulent behavior. Just last week, an institution announced a proposed settlement of $1 billion for these inappropriate actions. These actions are remarkable.
Even more remarkable, is the reality that consumers continue to utilize these institutions for the custody of their assets. Independent advice means more than ever but its advantages are often overlooked.
Why does independence matter?
I wish to remind our readers about the value of independence. Let’s have some fun to illustrate my point. I would like to polarize the idea of corporate strategy (top down) versus the idea of independence (client focused).
On occasion, I like to splurge and eat fried chicken. OK, I make this choice more often than my doctor would suggest. In any event, my options are plentiful (KFC, Smithfield’s, Bojangles, etc.) or even traditional southern fried at home. I keep the fire extinguisher nearby.
If I decided to visit Colonel Sanders at KFC and ask for the best fried chicken in town, I can assure you the employees at KFC won’t be recommending an alternate restaurant or the home cooking option. The fine folks at KFC are employees of the corporate franchise and are paid to promote KFC products. They are not paid or trained to direct you to the best option, cheapest option or variations that may be more attractive to you. The corporate strategy at KFC is to sell more of their product to you. In fact, the business promotes its “secret recipe.” For the record, I am a big fan of KFC and its product, but here is my point.
Independence allows one to navigate across many options for the most attractive resources. The independent advice idea is the opposite of top down and is centered on client goals. Independence allows for actions not beholden to the mother ship and the associated bias towards more lucrative products (corporate earnings). An independent fiduciary will put client interests above all others. Large corporations may have conflicting and competing interests such as sales goals, travel rewards and incentives that may not benefit the client. But yet, the large corporation or KFC will rarely refer you to the best resource available unless it serves their corporate interests. But today, people have choices.
The investment industry is changing dramatically and I believe these changes are for the better. An individual can choose from a multitude of options that are superior to the models of old. The evolution of financial advice is dramatically different today than it was when our firm was founded in 1998. I prefer the idea of independent advice without the secret sauce.
* The opinions contained in this material are those of the author, and not a recommendation or solicitation to buy or sell investment products. This information is from sources believed to be reliable, but Cetera Advisor Networks LLC cannot guarantee or represent that it is accurate or complete.