By Rita Cheng, CRPC®, CFP®
CEO, Blue Ocean Global Wealth
In my November Wealth column, I discussed the importance of the four “E’s”: Education, Expertise, Experience, and Empathy when selecting a wealth manager.
I’d like to add an “H” to the list: Honesty, for it is mission-critical when it comes to choosing the right advisor to handle your finances.
First, let’s make a distinction: Truth and honesty are often used interchangeably, but there is a difference.
While truth holds a universal or objective meaning, honesty conveys a more subjective feeling and depends on the integrity and intention of the speaker.
Like empathy, honesty is an attribute or virtue, while truth is considered the outcome of that attribute. This means not only disclosing the truth, but imparting the right impression. In business, it is possible to deliver the truth—but leave the wrong impression.
Regardless of the intent, this communication gaffe demonstrates a discrepancy between intent and actions.
For example, if a client is 55 years old and wants to retire and is not on track, it would not be honest to tell the client what he or she wants to hear—“Sure, go for it! You can retire if you want to.” An honest communication would require a conversation with the client about the variables for retirement (age of retirement, amount of essential expenses, amount of lifestyle expenses, part-time work, portfolio growth rate, portfolio withdrawal rate, Social Security Benefits, etc) and how they realistically relate to the client’s situation and expectations for retirement.
One of the core principles is integrity. According to the CFP Board’s “Rules of Conduct,” “Practice Standards”, and “Disciplinary Rules,” “Integrity demands honesty and candor, which must not be subordinated to personal gain. Certificants are placed in positions of trust by clients, and the ultimate source of that trust is the certificant’s personal integrity.”
Allowances can be made for innocent error and legitimate differences of opinion, but integrity cannot co-exist with deceit or subordination of one’s principles. A person demonstrates integrity when there is no discrepancy between intent and actions.
As Albert Einstein said, “Whoever is careless with the truth in small matters cannot be trusted with important matters.” The same is true for financial planners.
When investing your money with a professional, it is essential to to find a trusted planner.
To ensure that your financial planner is trustworthy:
- Be honest about your feelings. It’s much easier to accept the status quo than it is to acknowledge you’re really terrified and need guidance. Your planner should acknowledge that you are sharing your most intense hopes and fears with him or her. Where there is money, there are emotions. Helping clients with money is very personal, and indeed we all deserve to have the opportunity to reach our life goals. We owe it to ourselves to challenge ourselves to step beyond our comfort zone.
- Be honest about your goals. The financial planning process should enhance your quality of life. Financial planning is a holistic discipline. The best wealth managers are able to provide their clients with clarity and confidence in addition to sound financial advice. Clarity is key, as it pertains to determining what matters most to you. You should be confident that you have made smart financial decisions.
- Be honest with yourself. In an economy where “scarcity” seems to rule, abundance may seem impossible to achieve. We all worry about employment, energy, and housing, but if we move our attention and focus to honesty, trust, compassion, and peace of mind, there is the potential to see our lives, and our finances, in a new way. Indeed, the journey to abundant living requires honesty, integrity, and open communication in the financial planner-client relationship.
The Bottom Line
The courage to be sincere, open, and honest leads to confidence and empowerment. This is what helps everyone adapt to life’s transitions and move progressively closer to their financial goals.
As we leave the Thanksgiving table, and move toward celebrating other winter holidays, I challenge you to embrace this triple truth from the Buddha: “A generous heart, kind speech, and a life of service and compassion are the things which renew humanity.”
Marguerita M. Cheng, CFP® is the CEO of Blue Ocean Global Wealth, which provides corporations and institutions with portfolio construction, investment due diligence, and risk-management consulting services. The firm works with families, entrepreneurs, and executives to help them identify and achieve their financial goals. As a CFP Board Ambassador, she helps educate the public, policy makers, and media about the benefits of competent, ethical financial planning.
A Financial Planning Association (FPA) National Board Member and member of the finance committee, Cheng served eight years on the Board of Directors of her alma matter, The Robert H. Smith School of Business at University of Maryland, where she collaborated to increase alumni engagement and developed asset management education programs. She is also the President of the Blue Ocean Economic Empowerment Fund.
Cheng says her greatest joy and passion is touching the lives of others so that they may achieve their “personal financial success.”
For more information, visit www.blueoceanglobalwealth.com.
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