It is difficult to know your financial advisor without having known their upbringing and their life experiences. These are very important factors as your financial advisor must have your complete trust. How do you trust someone if you don’t really know them?

Recently I had a colleague in the legal field introduce me to one of her clients. This colleague and I are also friends, so she and I have been acquainted for many years and she knows my life experiences.

Hearing her introduction reminded me of why she refers many of her clients to me. Paraphrasing:

I trust Gary because I know how he treats people. I know that he looks out for his clients (and mine) as if they are family because I know his past. Gary entered the financial services industry 30 years ago because he didn’t want people to go through what his family went through.

I know I can trust Gary to do what is right for the clients that I refer to him because he has integrity, and he hates to see people taken advantage of.

My father has been a barber in Auburn, Maine for 62 years (still barbering at the age of 84 at the time of this writing). He has life-long clients that are his friends, though that list is dwindling due to their age. In 1985 when I was 16 my father took a tip from one of his barbering customers and invested with a local financial advisor who was doing business with many of Dad’s barbering customers. Long story short this financial advisor was caught trying to cross the border from Texas into Mexico. The advisor had squandered all of his client’s money, including my fathers.

Fast forward 6 months and my father’s landlord for his barbering business was selling the building and Dad was going to have to move or buy the building. He had been renting from this landlord for years and thought he had a good relationship with him. He had a hand-shake deal to buy the building. The day after receiving financing to buy the building he went to his landlord to sign papers he found out his landlord sold the building the day before without telling him to someone who offered him $10,000.00 more for the building. One of the partners who bought the building was the barber down the street and he said to me years later “If I knew it was your father who was in line to buy it we never would have bid on the building, but the owner didn’t tell us.”

Fast forward another 6 months when Dad had little to no savings, and a newly purchased building on a barber’s salary. The building that he bought to house his barbering business had a fire in the upstairs apartment as the tenant fell asleep with a lit cigarette. Because the insurance professional who sold Dad business insurance didn’t include business interruption coverage, he had to shut down his business for over a month while the inside of the building was rebuilt. All this happening at a time that he had just put the family house up as collateral for the new building, he had a new mortgage for the building, he had one child on his way to college, another (yours truly) would leave for college in 18 months. He had lost all of his savings the year before, and now he had no income.  It was the first time that I witnessed someone’s hair going from black to gray in a matter of weeks.

Dad said he got the paper route because he needed the exercise in the morning. He didn’t want his boys to worry, but we knew what was going on.

What went through my head at the time was “how does this happen to some who is as good a person as Dad is?”

Dad grew up in East Wilton and was pretty much raised by his community as he was adopted and had no father, so he trusted the people around him. Becoming a barber made sense because he is around the community all day long. But the country settling of East Wilton in the 1940s through the 1950s was much different than the Auburn/Lewiston setting from the 1970’s and 1980s. As our family quickly realized, there were not many people, or professionals that one could trust.

I went to business school to become a financial advisor so that no family would ever have to live through what we had to live through. I wanted to become someone that my clients could rely on for sound financial advice regardless of what the situation was. If I don’t know the answer to something I will find it, or I will refer you to one of my trusted close-net associates who specializes in the industry that you need (See my link to the Portland Business Network for some of the professionals that I utilize).

A term you hear thrown around a lot today is “Fiduciary”. What does it mean? There are technical definitions but to put into layman’s terms it means that you put your client’s needs ahead of your own. You do what is in the best interest of your client even if it is not in your best interest. It reminds me of what some people use for the definition of integrity: “Doing the right thing even when people aren’t looking.” How does one know if their financial advisor is going to do the right thing for them? Good question! I believe that if you “know” someone’s past, that is helpful. But if you don’t, what else can you search for?

If you are paying a fee for investment advice your financial advisor most likely falls under the Investment Advisors Act of 1940 which means that he or she is working on your behalf as a fiduciary.

If your financial advisor is a Certified Financial Planning Professional (CFP) then he or she is held to an even higher fiduciary standard, as they are a fiduciary for any financial advice that they give you even if they are not yet contracted with you for compensation.

I am licensed under the Investment Advisors Act of 1940, and I am a Certified Financial Planning Professional (CFP). If you are interested in knowing more about my past business and financial experience to see if I would be a good match for you and your family, please don’t hesitate to set up a 30 minute consultation by going to my online calendar at www.wealthsmithfp.com/book-apppiontment-online/. If you can’t find a time in my calendar that is open when you are available, call and speak with my receptionist and we will find a time that works for both of us. (207) 850-0075.