I am writing in response to comments made in the “Financial planning trends toward fee-only services” article in the April 25 issue.
I am constantly amazed (and saddened) by the capacity of some individuals in my industry (financial services) to obscure and cloud issues. They endeavor to put their way of doing business on a pedestal to the detriment of other equally valid methods of servicing an individual client’s needs. Finally, they make connections that are so transparent and self-serving that it shames us all.
The linking of the subprime crisis with fee-only advisers is one such connection. First, the implication was made that fee-only advisers are the sole independent and ethical voices in the financial world, which is plainly false.
A business model does not make you ethical, that comes from elsewhere.
To quickly follow up that statement with the latest financial crisis which has many Americans on edge and has even put some out of their homes is shameful and was only included to elicit an emotional response. The subprime crisis speaks to many problems in our markets with regulators, with securities rating agencies and especially with the whole of the mortgage industry. It does not speak to the differences between the compensation structures of financial planners. To use it in a comparison of “fee-only” verses “fee-based” (or even “commission-only”) is simply pandering, self-serving sensationalism and nothing more.
For 27-plus years Sullivan & Associates (and many other advisers that are not “fee-only”) have worked with clients on their overall financial picture, given unbiased financial advice, been subject to fiduciary standards and even taken some commissions along the way.
Yes, there are times where a commission can be in the client’s best interest, the world is not quite as “black and white” as some would have the investing public believe. Many advisers believe that in offering differing compensation arrangements (including an hourly fee) they can meet their clients’ needs and goals in the most cost efficient and effective way.
They do not presume to pigeon-hole all of our clients into a one-size-fits-all arrangement.
Kevin P. Sullivan CFA, CFP, CIMC