By Michal Emory on May 31, 2017
As a CFA Charterholder, I just returned from the CFA Institute Annual Conference. The conference brings in many top market and thought leaders with the goal of answering two questions:
- One, how can we add more value to what we bring to our clients?
- Two, how can we be leaders in the financial services industry and create positive change in how the industry conducts business?
Session after session dealt with different aspects of how to provide higher levels of service to our clients and how to build better portfolios for our clients.
Essentially, this Code is a professional Golden Rule. While we would all like these standards to be commonplace, I have seen too many other statements where, upon reflection, it was clear there was only one person the advisor was looking out for (hint: not the client).
So, why should this matter to you? It matters because you can take comfort in the fact that when we build your portfolio we do so with one question in mind: how does this portfolio best help you reach your financial goals? It matters because since we do not sell products, receive commissions, or sell mutual funds with loads, we are free to find the best investment products for you.
Next time a financial professional is trying to sell you something, ask a simple question. “How are you getting paid through this?” While it is not a difficult question, it can be an uncomfortable one, and it is crucial to the very first word of this article: trust. We all know that everyone has to be paid for their services. What is not okay is for someone to be paid in a way that disadvantages the client. Take mutual funds with front-end loads as an example.
What is a front-end load? It is a commission paid to the advisor that is taken out of your investment. For example, if you invest $10,000 in the American Funds Growth Fund of America (which has a front-end load of 5.75%), then $575 gets paid to the advisor and you are only left with $9,425 to invest. This means that your investment needs to grow 6.1% over the next year just to get back to $10,000.
At The Trust Company, what matters to us are your goals. We look at ourselves as your partner and friend on this financial journey. And as a CFA Charterholder, I commit to you that every action my colleagues or I take is an effort to get you closer to your financial goals, in a way that is free of any conflicts of interests or concerns of ulterior motives.
Your success is our continual motivation. That is why working with a CFA Charterholder matters.
Here is the link to the CFA Institute's Asset Manager Code that I mentioned earlier in the article:
Michal Emory, CFA, is Vice President & Chief Investment Officer of The Trust Company.