What We Believe and Why

whatwebelieve2Inauthenticity rules the realm of investing and financial planning today…and really always has. The Internet, print media and airwaves are full of pitchmen for big financial services firms saying how they are changing their approach to be on the side of investors with retirement accounts. What have they been doing up until now? What are they doing for those assets outside retirement accounts? Yes, this indeed is inauthentic.

With that as a backdrop, it might be fruitful to review our primary beliefs, and more importantly…why we believe these to be true. We write often about the significance of inputs. Our ultimate input is authenticity; a deeply convicted belief in core principles that can translate into substantial good for those we serve.

The primary beliefs that we hold as most important have varied little from the time we started our firm over 30 years ago.

  1. We believe that the interest of the client always comes first. If advice flows from an environment where the “advisor” is paid by selling investments or insurance products, then the result is a sales pitch…not advice. By contrast, if this advice comes from a relationship where the advisor is paid exclusively by the client, the result is fiduciary advice. The importance of the client, (“one under protection of another”), relationship versus the customer arrangement of brokers is transformative. We believe this because of the serious harm that has been done over time from the “customer/sales” approach. Generations of well-intentioned investors have placed their futures in the hands of brokers and that system has largely failed them.
  1. We believe in the collective wisdom of markets. We believe that markets work. Markets are a core part of capitalism and a tool for growth and prosperity. Market forces can be harnessed but not routinely timed or out-selected. We have this belief because of the overwhelming evidence based on almost 90 years of actual market data, along with several decades of academic research findings.
  1. We believe the long list of behavioral biases and cognitive errors are “the silent killers” of many financial futures. Individuals are sometimes unaware of these inherent biases or, in other cases, think they can outsmart them. We believe these are significant because of the wide body of research in the field of behavioral economics and neuroscience over the past quarter century. This research provides substantial evidence of the huge impact that behavior has on financial decisions and how our brains operate under conditions of uncertainty.

These core beliefs are embedded within our client relationships. The personal and trusting relationship, in fact, is a key factor in clients acting on advice and making progress. Ready to make some changes? Ready for a real conversation?

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