PRACTICE TRANSPARENCYSubmitted by Bernhardt Wealth Management on February 20th, 2018
Fundamental of the Week: #3 – PRACTICE TRANSPARENCY.
We sell trust more than we sell anything else, and nothing helps build trust more than practicing transparency. Be completely transparent about our relationships, our fees, and even what we can and cannot do.
I worked for two different companies during the first two years of my career in financial services. Of course, I was required to recommend the products and services that were approved by those companies. When it came to compensation I remember being coached to say something to the effect that “I would be compensated by the companies that were deemed appropriate for them to use and that we would recommend.”
Obviously, there are a lot of sales professionals in thousands of companies who are compensated by commissions. And they are not bad people. But I never once felt comfortable telling someone that compensation statement. To me, it didn’t feel right and it certainly wasn’t transparent. But much of the financial services industry is built on a compensation model in which the consumer does not know what is in it for their broker whether it is the broker selling them individual bonds, master limited partnerships, managed futures contracts, etc.
That lack of transparency is part of the reason that drove me to create Bernhardt Wealth Management (BWM) in 1994. BWM receives no commissions, trips, etc. from any company or individual we recommend. It has always felt better to share with clients that the only compensation we receive is the fees they pay us.
Our clients deserve to work with a trusted financial advisor who is transparent about the fees we charge and the relationships we recommend. It definitely goes a long way to help build trust.