Should a financial relationship be about doing what’s right or feeling good? The former, right? Not so fast.
A survey by index zealots DFA found the #1 thing valued in receiving financial guidance is a “sense of security / peace of mind.” Not that that’s a bad thing of course but at 35% of respondents it beat out knowledge of financial situation (23%) and progress towards goals (20%).
Yup, you read that correctly. More than 1/3 of people would prefer to feel good than the 1 in 5 who would prefer to make progress.
Is it any wonder there are parts of the financial services industry dedicated to promulgating their vision of what our lives should be like? TV ads showing smiling seniors nodding over a cup of coffee as they sit in their well-organized kitchen or mom and dad holding one another while watching junior score the winning goal during the weekend soccer game.
That’s all well and good but it’s distracting . . . and intentionally so. Some financial firms would rather sell the idea of comfort and security to distract from the truly valuable things they could be providing and clients should be requesting.
We’re not suggesting the Fiduciary Rule is/isn’t a good idea but the “tell them what they want to hear” approach some firms take in, um, “advising” clients is surely one motivation behind it.
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