Many residents of my town of Cheshire would believe that the town needs another financial advisor like we need another Italian restaurant. But they’d be wrong – and I’ll tell you why. Think of the last time you went to your favorite place to have some delightful Pasta Fagioli (or whatever floats your barca.) What if, when you placed your order with the server, she wrote it down, confirmed it with you and then said “Ok, that will be $45.00 plus my $9.00 tip, and I’ll need that tip before I place your order.” Confused, you and your dining companions look at each other quizzically and you respond “But how do we know that you’ll still take care of us adequately to earn that tip? Will you check in frequently? Bring us drink refills when we need them? Make sure the order is prepared acceptably? Take our used dishes and utensils? Return our calls in a timely manner?” Of course, that would never happen in a restaurant. But it happens frequently when dealing with brokers. They collect the commission on your mutual fund or annuity purchase with the promise and good intentions of servicing you as you would expect, but reality hits and now that you’re no longer a source of revenue, they have to move on and spend their time finding the next customer that will continue to keep their revenue coming in. This is the reality of the commission-based financial services model.
In the early- to mid-1990s, consumers started departing the outdated brokerage model in favor of fee-only advisors which are compensated in an ongoing manner – meaning that these advisors must earn their fees on a daily, ongoing basis. And this is more becoming the investors’ preference as, according to Cerrulli Associates, the number of fee-only advisors doubled between 2003 and 2010. When Springboard Asset Management was still in the planning stages, we had no question that we would serve our clients better as a fee-only financial practice and, as residents of Cheshire for decades (Rebecca is CHS ’93) we were aware that there was not a single NAPFA registered fee-only firm in Cheshire or the surrounding area. And we knew that needed changing. A very high percentage of our clients have come to us because they felt that once their former advisor had collected their commission, they moved on and didn’t offer the service that the client needed. If you’ve had that same experience, contact a firm that is committed to the fee-only advisory model and the advisory experience that your family deserves. And there’s no tipping necessary.