It’s Their Money by David Merkel, CFA of AlpehBlog

Recently, I had a client leave me.  I’m not sure why he did — I didn’t ask, because that’s his  business.  It *is* his money, after all, not mine.  After deducting the accrued fee, I thanked him for his business, and wished him well.

I try to be low pressure in my work.  I also try to discourage the idea that if someone uses my services, they will do better than the average, much less phenomenally.  I remind potential clients of what happened to stocks in the Great Depression (down almost 90% during a period in 1929-1932).  I ask potential clients to stick with me through a full cycle of the market, but I don’t require it because:

It’s their money.

One thing I do promise them is that my money is on the line in the exact same proportion as their money.  Over 90% of my liquid wealth is invested in my stock portfolio.  I don’t make any decisions for clients that I would not make for myself, mostly for ethical reasons.  But I make sure of it, because I am still my largest client, and I am always on the same side of the table as my clients, aside from my one and only source of revenue, my fee.

It’s their money, but, when it is under my care, it gets the close treatment that my own money receives — no more and no less.

Many wealth/asset managers want as much of a client’s assets as possible.  Me?  I get uncomfortable when more than 50% of their assets are riding on me, but if that’s what the client wants, I will do it if they ask, because:

It’s their money.

Jesus, inverting Hillel, said “Do unto others, as you would have them do unto you.”  That guides my marketing, because I know that many people feel pestered by those who market to them, including those who once they have their foot in the door, now want the whole relationship.  Thus I avoid as much pressure as possible in marketing, and leave it to the good judgment of my clients as to how much they want to entrust to my care, and for how long.

It’s their money.

I don’t pretend to have all of the answers, or even all of the questions.  If one of my clients asks me an unrelated question, and I have the time and expertise to aid them as a friend (i.e., you can’t sue me), I will take some time to help.  They may ask me about what other managers are doing for them, asset allocation, insurance policies, and other things also.  I will give them friendly advice, without any other expectation. I thank them that they are a client of mine — I try to end all of my client letters with that.  In the end, I want them to be happy that they chose me to aid them, and to be happy when they leave as well.

That’s the way I would like to be treated as well — low pressure, transparency of services and fees, and alignment of interests with an ethical adviser who is a fiduciary.

Back to the beginning, aside from the client leaving me, the other reason I write this is all of the pitches I have been getting via e-mail, web, radio, etc., where I say to myself “How can they promise that?” “Doesn’t that break the ‘No Testimonials’ rule?” “Great to be selling advice and seminars — why not start an investment business and prove your theories?”

The investment business has more than its share of those who don’t deliver value, and I labor to be on the positive side of that ledger, as do many others.  Choose those who will treat you as you deserve to be treated, and enjoy the benefits, because:

It’s your money.

Wealth/Asset Managers: It's Their Money