March 3, 2008

Grab Your Integrity and Hold on Tight!

Picture courtesy of Ian David

After quitting my job and starting my own company I thought it was time to look into a financial adviser. It was not that my company was ultra successful so I needed somewhere to put the money (far far from it), it just seemed that someone who new more about how to grow wealth than me was needed. I have almost no interest...okay, no day trading or monitoring the stock market to plan my next stock purchase. But there are people who love it and make a living at it...oh the beauty of capitalism. So why not pay them?

One seemingly opportunistic day while working at Starbucks I struck up a conversation with a really nice person that ended up being someone that could possibly help me with this. Chrystal and I met with them a few times and discussed our financial goals. We reviewed how we should roll over our 401K, what our risk acceptance and aversion was, and all the options of where our money could go. After three meetings we were heading towards investment in a VUL and rolling our 401K into a traditional IRA.

We put our trust in this person and I liked them. I felt we had a bond in being young entrepreneurs, expecting parents, and Christians. In our last meeting to sign papers I was advised to answer a question on the application untruthfully. I questioned the advice and said I would prefer to answer the question truthfully. But I left the meeting feeling very unsettled. In order to not make a short story boring, I'll get the point that today I let the person know we would not be investing our money with them or their company.

The point of this post is this.

Never ever ever do anything that brings your integrity, honesty, or character into question with your customer.

I believe the person we met with is honest, has a high character, and values integrity. But this one thing made me call into question the advice we were being given. And since we were talking about our financial future, I was not willing to take even a small risk.

From a letter I received from the person we met with this was a learning experience for both of us. I took five points from this experience.
  1. When deciding on who you are going to work with to invest money, I think it is best to talk with the actual person that is going to be investing your money. Seems somewhat like common sense now. ;-)
  2. Before you meet with someone about your finances, do your own research on what you think the best options may be. Have a basic understanding of options so you can talk the talk.
  3. Find out exactly how fees are paid and who is paid. Ask for a detailed example of if you invest X, and have a return of Y, what will be paid by you in Z. This will most likely be a hard question to get answers to. It is worth it.
  4. Entering a partnership like this is a bit like getting married. The first meeting is informal and soon you are talking about long term plans. There is a cost to get in and a larger cost with penalties to get out. And more important, even a small amount of perceived dishonesty can ruin the entire relationship.
  5. Last but most important was the confirmation that the most important thing you can be to your customer is honest, always!


Andy said...

what was the question and what did they suggest you answer?

Kevin Sturm said...

That would make the story longer and less interesting. But it had to do with the reasoning behind investing in a VUL.

Chrystal Sturm said...

Andy with the juicy questions!

Ken Davis said...

Hey Kevin:

If you decide to look elsewhere for an advisor, I can certainly make a good recommendation. My former boss (from many years ago, when worked for INSP) has his own boutique investment firm in Nashville. I'm sure he would be glad to speak with you. Graduated top of his class from The Wharton School; extremely sharp guy, and a strong Christian. Just shoot me a note and let me know.

He does some work for me (not that there's that much for him to work with), but he'd be a great asset for you personally, and for your business needs.)