When Business Dares to Get Personal

It is often said that business and personal matters need to be compartmentalized with a solid barrier between the two. When it comes to meaningful financial planning, nothing could be further from the truth.  I should know, that is how I ended up in this business, when I had little interest about finance at all.

My father’s battle with Alzheimer’s Disease marked a turning point for me (and for my husband, Tony).  It was the first time I looked at money personally when the stakes were very high.  Not even purchasing our first home ranked on this emotional Richter scale.

My mother was counting on us.  She wanted my father to stay home and be cared for by her, with the help of aides.  The healthcare expenses, of course, had nowhere to go but up, as he would become more and more incapacitated.  We had the added challenge of making sure her future was secure and that her potential healthcare needs could be met from the comfort of her home.

It was a lengthy and complicated process hindered by the fact that my father’s recordkeeping skills relied on the filing cabinet in his brain.  After the portfolio was realigned, the estate plan executed, and the potential high brokerage fees avoided, I turned to Tony and remarked that this was no longer a hobby, interest or a favor.  This business of taking great personal care with someone’s financial future was one that was desperately needed, and extremely hard to find.

So years before words like “fiduciary” and “fee-only” became controversial, we designed a low-cost, fee-only registered investment advisory firm to service clients’ financial needs and put their needs ahead of our own.  The fiduciary standard is not something we discussed or debated.  There was nothing “strategic” about our set-up.  We simply offered clients what we would want for ourselves and our loved ones – and we delivered it.  It doesn’t get more personal than that.

Founded in the aftermath of the tech bubble blow-up, I was certain that our firm would attract investors who had gotten in over their heads day-trading during tech’s glory days, before it turned so very dark.  In fact, we did attract many deeply scarred tech investors; but, it was astonishing to see that they had come from major brokerage firms.

They had paid a steep premium in commissions and fees and received highly concentrated, risky bets. What they didn’t receive was more telling.  Financial plans, and asset allocation/risk reward strategies were noticeably absent; the investors’ time horizons weren’t factored in to the portfolio construction.

It was obvious that no personal connection was forged with these clients; otherwise the risk profile of the portfolios would have been significantly less turbulent.  Had these “professionals” taken the time to put themselves in the shoes of these clients, they would have thought less about transactions and commissions and more about what was truly the right thing to do.

They would have made sure that the basics were covered, like having a fully funded emergency fund; maximizing retirement plan savings opportunities; and ample term life insurance.

Our desire was to right this wrong; to help these people.  It was rewarding, but lonely.  It seemed like no one spoke our language.  Worse yet, when I would explain what our business was, I would often hear cringe-worthy remarks, like: “Oh, so you’re a broker.  You’re in sales.”

The decision to remain independent was really a function of not finding other like-minded financial professionals.  Meeting up with the very talented crew that compromises Ritholtz Wealth Management has been like stumbling upon a small tribe who also speaks our rare dialect.  We are thrilled to be joining them and hope that, in combining forces, more investors will choose to only work with people who take this business very personally.

For my part, I hope to help educate investors from the many personal experiences we have encountered, like: preparing for a single paycheck home; saving for retirement;  getting estate issues in order; looking after the finances of aging/ill family members; starting a charitable giving plan; saving for college costs; and raising financially literate children/heirs.

I promise to speak in plain English.   In my previous life I wrote marketing materials for broker-sold investment products (the very ones I would never recommend today).  One could say I have some atoning to do, and this is how I plan on redeeming myself – by translating the misleading language and empowering investors to make informed decisions.

Over the years, we have seen how the emotional tug of money issues can lead investors  astray, and this blog will also encourage examining motives, manipulations, fear and greed so that the tail stops wagging the dog.

I suppose my goal is to put the personal back in personal finance so that investors can finally see that those who have nothing to fear will offer education and transparency.  The most important take away is that investors deserve to work with professionals who take this business very personally and work with them, not at their expense.  Anything else is settling for business as usual.

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