Author: Brad Knapp,  Senior Managing Director and Head of Private Client Group

Since 1989, Clearstead has operated as a fee-only advisory firm. We continuously communicate to clients our objectivity and what that means for their portfolios’ performance, but sometimes an article from a trusted source can provide additional illustrative points that benefit our clients.

A recent Wall Street Journal article by Marty Zweig titled, Have I Got a Fund For You! Why Brokers Push Some Investments, points out how brokerage firms, banks, and some financial planning consultants encourage clients to put money in funds with higher management fees and conflicted incentive structures.

Is your current advisor making objective investment recommendations that are always in your best interest? Here are some questions to consider asking your wealth management consultant today:

  • Do you have any revenue-sharing payments between mutual fund companies and their brokerage?
  • Are my investment choices limited to those that have “pay to play” revenue-sharing payment relationships? For example, according to Zweig’s article, Morgan Stanley no longer offers Vanguard funds as they don’t have a revenue-sharing payment program.
  • What kind of due diligence do you perform on outside managers? Is the same due diligence applied by the same standard across all funds? Zweig points out how standards differ when the fund is in-house.
  • Do you suggest alternative investment funds because they carry better economics for the brokerage companies? According to Zweig, Bank of America Corp.’s Merrill Lynch publicly discloses that it makes more money on some alternative-investment funds, citing that they “may have a conflict of interest.”

I’m extremely passionate about the objectivity Clearstead brings to clients because I’ve seen the other side. I used to work for a bank and faced pressures to push commoditized products on clients. It was uncomfortable and inauthentic to know that I wasn’t always giving my clients the best advice. This is why I now work for Clearstead and lead a team of independent wealth management consultants.

With an in-house research tea  and an institutional investment consulting practice that includes an outsourced chief investment officers offering, 401K consultant and retirement plan consultants —  we perform our own due diligence on investment managers and funds so we can give independent objective advice. At Clearstead, the only compensation we receive is our client’s advisory fee and we do not share compensation with any investment manager or third-party product of any kind. We believe that this model will protect our clients from a sometimes unscrupulous and undisciplined financial services industry.

How will our objectivity benefit you?

When Clearstead first engages with a private client, we launch a no-fee ClearSight Financial Analysis. Our tax, estate, and planning experts analyze all aspects of our client’s financial lives and provide customized recommendations.  A key part of this analysis is to evaluate your current advisor and investment fees and incentives.

Guided by the understanding that every client’s financial needs are unique and require the investment of time, relationship-building, and customized solutions, our company was created to deliver optimal results and stand apart from homogenized, mass-marketed financial products promoted by big financial institutions. ClearSight is the first step towards gaining clarity and forming a plan that is customized to meet your family’s greatest aspirations.

Do you want to learn more about how objectivity will benefit you? Request a ClearSight invitation today.

Find Your Clarity

We bring our clients objective financial leadership through our fee-only advisory model, which enables us to remain objective. We do not offer proprietary products and take no commissions from product sales: our only source of revenue is fees we receive for financial advice. True to our founding principles, we do the hard work: the day-to-day investment management integrated with organizational priorities and family aspirations.

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