Sometimes Doing The Right Thing Hurts

Sometimes doing the right thing hurts.

I recently had to decide to end my relationship with a provider that is going to no doubt slow the growth of my firm.

As a business owner, it is hard to know if it was the right thing to do.

As a Financial Planner that acts as a Fiduciary and puts clients’ best interest first, it was an absolute no-brainer of a decision.

Let me tell you more about what happened, why it is important for you, and how we are moving forward together.

They changed the terms.

I was using a provider that in the financial world is called a Solicitor. They do a lot of marketing and bring in prospective clients, which they then pass off to Advisors like myself for compensation. Working with this Solicitor, they took a percentage of future income as compensation for a defined period of time, after which you could purchase the contracts back.

The first 10 months or so were great. They sent referrals, from which I got several of you as clients, and some you have even sent referrals that have become clients! It was a great experience.

They only worked with Fee-Only Fiduciary Advisors, and you had to have earned a certain level of credentials like being a CERTIFIED FINANCIAL PLANNER™ or other equivalents. It was a great fit, and having heard other experiences with them I was really pleased with the relationship.

Then, they breached the contract for the first time. First, they cut off referrals until I agreed to a fee increase, despite having a contract in place. I didn’t like it, and I thought for a good while before I agreed to it. I had to way the pros and cons of it, and decided that continued business growth was worth it. So I relented and referrals came again.

This change only hurt me, which as a business owner was something that I could accept.

I got a few more clients after this, and all was well.

Then they did it again, but this time it was unacceptable.

After a few more months, the Solicitor did it again. In breach of contracts, they cut off referrals and said that they would only turn them back on if we agreed to their new terms, to use their platform for all new clients.

A platform, in the investing world, is a website/app where Advisors go to manage investments for clients. Make investment selections, rebalance, process deposits, withdrawals, etc. on behalf of clients. For those of you who are clients, we use Altruist for all new clients coming.

The Solicitor tried to sell me on the benefits, like a higher retention rate for prospective clients (even though my closing rate from prospect to clients was orders of magnitude higher than their average advisor, and I was told I consistently got great reviews internally from prospective clients and their employees).

It took one phone call with them to see what the real deal was, the platform made them way more money.

Altruist has no fees for clients and minimal for me to have the investments there, if we use the portfolios that I built (which is the standard way we do things).

Their platform charges to have the investments there. They charge a percentage of investments fee to work there.

What does that mean?

It costs potential future clients more use their platform for investments as would be required.

They say that they only work with Fee-Only, Fiduciary Advisors, yet the made a big change in their platform that was antithetical to this kind of Financial Planning.

This change didn’t hurt me, it hurt future clients.

This I would not accept.

I told them no!

Since I wouldn’t accept the change, the relationship was terminated.

What now?

Look, I will be frank with you as a reader.

This will probably hurt my growth.

I now have less prospective clients coming in than I did before.

I am okay with that.

I would rather do the right thing, always, than I would allow a corporation dictate how I run my business, especially when goes against all of the values that Snowcap Financial was founded upon.

I believe in providing value to clients in every possible way, including keeping any fees that I can down to a minimum.

I believe in doing the right thing. I believe in running my business the right way.

I will always put my client’s best interest at the forefront of all of the business decisions that I make.

But let me tell you a secret:

I don’t believe that it really will hurt my growth.

I believe that, in general, if you do the right things that you get rewarded for it. A kind of cosmic karma.

I will continue to do the right things, and the clients who I am supposed to work with will come.

I could use your help your help though!

I really appreciate the referrals you guys have sent to me. Some of you are clients because of it and I don’t take clients on that I am not genuinely excited to work with.

I provide every potential client with the same care and dilligence.

If you know anyone that could use the value that I provide, I would love to meet them!

I always appreciate honest reviews too. Google Reviews visibility is a massive help for finding prospective clients, or as prospective clients research me.

I also love constructive feedback! If there is some way in which I can be better at delivering value for you, please do let me know!

Work with someone who puts your interests first!

All written content on this site is for information purposes only. Opinions expressed herein are solely those of Snowcap Financial, unless otherwise specifically cited.   Material presented is believed to be from reliable sources and no representations are made by our firm as to other parties’ informational accuracy or completeness.  All information or ideas provided should be discussed in detail with an advisor, accountant or legal counsel prior to implementation.

Photo by Liza Summer