I read an article recently discussing how the term "wealth management" was being misused. The article focused on how clients perceived the term in relation to how much they were paying in fees. I have always objected to this type of thinking. How we describe ourselves as professionals should be defined through our core values, not by how we are compensated or our business model.
In the past decade, much has been written about the value of fee-based planners over commission-based agents and/or advisors. I network with many advisors using different compensation models; many use fee-based planning models while many use a commission-based model. Both groups not only provide quality service to their clients but they also meet their needs. There are many instances where insurance needs cannot be met with the limited fee-only products. And, there are many client goals that can be met with just fee-only, assets under management account.
It's time to re-think the value of advice and define it by the level of competence, expertise and integrity toward the client. Our industry must get to the point where lobbyists and regulators relinquish the power to define professionalism, and make it about how our clients perceive successful client/advisor relationships by exceeding expectations, regardless of how we are compensated. Working with a financial professional needs to be a personal choice built on relationship, trust and a confidence that the professional will exceed the clients' expectation. All of those things can be completed with various compensation models.
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