Fiduciary Standards

Insights From a Fiduciary

If you ask a group of people what a financial advisor does, chances are you’ll hear many thoughts on the types of services offered—but in some cases you may just get a blank stare.

A 2016 Harris Poll revealed that 36 percent of respondents said they don’t have a strong understanding of what services a financial advisor provides. But, the confusion is understandable since the role of an advisor has morphed into various specialties and niches over the years.

For instance, how many people in search of a financial professional understand the significance of working with a fiduciary?

Denson Lipscomb, president of Lipscomb Investment Group, LLC, based in Auburn Alabama, has built his independent, Registered Investment Advisory (RIA) firm around the fiduciary standard.

“As registered investment advisors, we are held to a higher standard than traditional brokerage firms. We work on a fee basis, not a commission basis. And, as a fiduciary, we are obligated to do what is deemed to be in the best interests of the client,” said Lipscomb.

Clients of Lipscomb Investment Group most often want comprehensive services that extend beyond money management to plan their financial future. Typically working with high net worth clients with $250,000 in assets, Lipscomb collaborates with the client’s attorneys, tax accountants, insurance, and other related professionals to ensure a holistic and cohesive financial plan.

“We work with a team approach. We’re the quarterback, and the client is the coach,” he said. “It’s a matter of educating the client and helping them plan in all different areas and facets of life.”

denson400x300Based on his experience in the financial industry for over 40 years, Lipscomb says he finds no correlation between a client’s financial intelligence to his or her level of education and professional success.

“A lot of people haven’t been subjected or privy to finances or investing, so our education process with clients is ongoing,” he said, adding that he keeps pace with changes and innovations in the financial industry.

In fact, as part of that innovation Lipscomb Investment Group utilizes planning tools that assist the client’s understanding of their income and expenses and their assets and liabilities which identifies the importance of knowing their net worth. This foundation lays the groundwork for setting and accomplishing financial goals such as education, retirement, and legacy planning.

“We have tools that allow us and the client to input all of their financial information into a plan and program that we can review, and that they can work on themselves. It is very customized because people are different and look at things differently,” he said.

As an example of such different client perspectives, Lipscomb points to risk tolerance saying that some people define risk as not wanting to lose anything, while others define it as being able to endure market declines.

“No two plans are alike; they vary significantly depending on the attitudes of the clients and their desires and needs,” he said.

Through the years, Lipscomb has observed a shift in perceptions, attitudes, and behaviors of people across generations towards money and investing. Today, the media’s financial news networks tout short-term returns and ignore investing for the long haul. And, people are turning to online investment management tools and financial advice platforms called robo-advisors for help. But, with the lack of financial education programs in American schools, people don’t have a solid financial foundation as to the value of a dollar and how to manage it wisely as they enter adulthood, he said.

Pinpointing the reason for his firm’s success and continued growth, Lipscomb said: “There’s a whole lot more to this business than managing somebody’s money—it’s more of being invested in the client and working with them to solve a lot of life issues and a lot of life’s concerns, and not just whether or not they’re going to get a decent annual return on their investments.”

For more information, visit: Lipscomb Investment Group, LLC

 

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