How to Manage Money Scripts
Let’s focus on actionable strategies to manage money scripts, flip unhelpful patterns and build healthier financial behaviors.
In selecting or retaining a financial advisor, how do you know if you are making a wise choice?
In the medical profession, physicians practice according to a familiar standard: “First do no harm.” It seems there should also be a similar level of commitment for anyone who wants to advise you about your financial well-being, right?
Unfortunately, that is not always the case. Financial advice remains subject to troublesome double standards. It is still up to you to spot the subtle differences, and heed the quality of advice accordingly.
Red tape and legal jargon aside, we suggest seeking advice that exemplifies a few simple ideals:
“There’s no confusion in the minds of investors as to what they want. They’re very clear. They want somebody they trust who makes recommendations that put their interest first and don’t allow the advisor to profit financially at their expense.” – Phyllis Borzi, Dept. of Labor EBSA Head (2009–2017)
That makes sense, right? There is even a term the investment world has been using since at least the 1940s to describe this highest standard. It is called fiduciary advice.
Fiduciary advice makes sense to us, too. Investors deserve nothing less than the fairest possible shake from anyone entrusted with advising them about their personal wealth. For decades, the fiduciary standard (in contrast with a lesser “suitability standard”) has shaped this highest level of care for those of us committed to delivering it.
In theory: Anyone offering investment recommendations is supposed to minimize their conflicts of interest, and disclose any inherent conflicts they cannot eliminate.
In reality: Not all financial advice and investment recommendations are created equally:
| Ideal Full-Time Fiduciary Advice | Typical Broker-Dealer Investment Recommendations |
| An independent financial advisor’s sole duty and source of compensation across your entire relationship is to advise you according to your highest overall financial interests (even ahead of their own). | A broker, banker or insurance rep is focused on other financial services, while potentially tacking on point-of-sale (incidental) investment recommendations. |
Even if a broker-dealer is doing their level best to recommend sound investments, they are unlikely to be aware of the intricate interplay among your total wealth interests. Without that critical context, how can they know whether a particular recommendation is truly best for you and your bigger picture?
Practically speaking: Investors must still sort out what else may be driving stand-alone recommendations. While legal disclosures can help, when is the last time you read one and understood what it meant (or asked probing questions until you did)? For most, it has been a while. As such, disclosures alone may fail to protect investors from falling for sales pitches in disguise.
In the next installment of this series, we will take a look at addressing the decisive details when it comes to fiduciary advice.
This post was written and first distributed by The Writing Company.
DISCLAIMERS
This material is intended for general public use. By providing this material, we are not undertaking to provide investment advice for any specific individual or situation, or to otherwise act in a fiduciary capacity. Please contact one of our financial professionals for guidance and information specific to your individual situation. This is not an offer to buy or sell a security.
Shore Point Advisors is an investment adviser located in Brielle, New Jersey. Shore Point Advisors is registered with the Securities and Exchange Commission (SEC). Registration of an investment adviser does not imply any specific level of skill or training and does not constitute an endorsement of the firm by the Commission. Shore Point Advisors only transacts business in states in which it is properly registered or is excluded or exempted from registration. Insurance products and services are offered through JCL Financial, LLC (“JCL”). Shore Point Advisors and JCL are affiliated entities.
Let’s focus on actionable strategies to manage money scripts, flip unhelpful patterns and build healthier financial behaviors.
End the year strong. Review your finances, maximize savings and explore tax-smart strategies for a confident start to the new year.
One concern about the increasing popularity of index funds is whether the decline in active management has impacted the function of markets.
Discover the hidden influences on your financial decisions, and how they impact saving, spending and investing.