Chapter 2 Summary:
While it would be nice to assume big financial firms provide sage, prudent, and unbiased recommendations, their history has proven instead their lack of ethics and corrupt character. They only do right when forced to by public outrage and regulation. The lack of ethics is built into their core. Just doing what is right and in their clients’ best interest does not appear to figure into their calculus. Their focus is profit and achieving it through whatever means they can get away with.
To best serve their clients, financial advisors at big financial firms must often ignore their firm’s guidance, training, ratings and recommendations in order to best serve their clients. Fortunately, many such advisors do just that—they ignore the corrupt advice their firms are pushing.
Independent financial advisors avoid these biases by not working at a big financial firm at all. For this reason, independent advisors can more easily provide responsible, unbiased, client-centric advice. Independent financial advisors also offer far more investment choices because they face fewer pay-to-play influences, and are free to direct their clients towards the best investment possibilities.
Independently-thinking advisors may choose to continue working at their big financial firm, but they must identify and reject the self-serving recommendations their firm promotes. Plus, they must remain steadfast, providing client-centric advice even if it conflicts with typical advice in their firm.