A Client-Centric Model
SeCura Partners, LLC was founded on the premise that most of the retirement planning and wealth management that exists today is based on a faulty foundation. The faulty foundation exists because most planning is designed to serve the financial institution and not the end client.
Have you ever asked yourself why your advisor pursued you heavily in the beginning and stressed the importance of rebalancing on a quarterly basis? She showed you all her fancy charts and her “proprietary asset allocation model.” Then she went into stealth mode a year or two after the account was opened.
Why did the importance of her sales pitch seem to fade after the relationship was established? The reason the personal touch began to fade is because the traditional model is designed to help financial advisors acquire as many assets as possible, not deliver financial excellence.
At SeCura Partners, LLC, we believe financial excellence is not scalable because it is personal to each and every client. There are no “one size fits all” solutions. Financial service firms can choose to have excellence in marketing or financial excellence, but not both at the same time. Financial companies must choose their master, we choose financial excellence.
We take the time to learn our client’s unique circumstances and goals. We believe client-centric means knowing our clients and making their best interests our priority.
Challenging the Status Quo
Charts and graphs, charts and graphs, and more charts and graphs. Is this what you receive from your advisor? “Your asset allocation consists of 45% large cap growth stocks, 30% bond funds, 15% emerging market stock funds and 10% real estate. Blah, blah, blah, blah, blah.”
The focus of most wealth management is on the asset, while nearly 90% of Americans need to be focused on the income their investments will produce over the life of their retirement. We pay our bills with the income our investments generate, not with the five star rating of the Mutual Fund Of The Month. If we pay our bills with the income our investments generate, why do most financial service firms want to take our eyes off the “income ball” and put our focus on their “asset allocation and rebalancing services?”
With your focus on the asset and their “proprietary asset allocation model and quarterly rebalancing services,” financial service firms can now get you to pay them for their perceived expertise.
The fee-only movement started in the 80’s as a protest against the traditional Wall Street brokerage model. While the idea sounds good on the surface, the challenge is that the Fee-Only model does not address the “Agency” conflict. The Agency conflict exists any time the financial institution and their clients have different interests.
The Fee-Only planner has an interest in keeping your assets under their control so they can continue billing you their 1% management fee. You are interested in maximizing the return on your assets for the given level of risk you are willing to take and they are interested in growing their asset base so they can increase their billing revenue. This is not an indictment of the industry, this is simply an observation of the current state of the financial services world.
As an example: According to Morningstar (the premier third-party source for mutual fund data), all funds in their database returned an average of 3.38% to the investor over the prior decade ending 12/31/10. The interesting thing about this data point is that, over the last decade, there were no Fee-Only advisors who would have recommended a commission based product that would have given their clients guaranteed account growth well above 5% along with a guaranteed income stream that would begin on the date of the client’s choosing. These types of products are often an appropriate component of a well rounded portfolio.
The reason most fee-only advisors are unlikely to recommend mitigating your investment risk and provide you with a guaranteed income stream is because this strategy would take away from their pool of billable assets. They will have less assets upon which to bill their 1% management fee if they recommend you move into a financial product with a guaranteed income stream.
The agency conflict is there, most advisors refuse to acknowledge it, SeCura Partners, LLC chooses to lay it out for you the client and let our actions speak louder than our words.