Fiduciary Standards

Putting Clients First

Michael Calvelli spent more than 30 years working in financial services in New York and San Francisco before he began working directly with clients as a financial advisor. During that period, he spent his career at investment firms, custodial banks, clearing firms, and working with independent broker-dealers. He also started a broker-dealer in San Diego.

“Through all that, I really thought that I would love to work with individuals,” Calvelli said. "It just felt like there was more to the financial industry that I was not experiencing.”

That concern grew during the Great Recession and the economic fallout that continued for years afterwards.

calvelli qouteCalvelli took some time away from the corporate environment to seek opportunities to work one-on-one with clients. He met a woman who ran a successful financial advising practice in Santa Rosa, California looking to retire who needed someone with Calvelli’s background to take over. The two worked side-by-side for a smooth transition. In 2015, Calvelli officially took over which brought him to his current role as the founder and registered principal at Open Trail Financial Consultants, and Office of Supervisory Jurisdiction (OSJ) supervisor of Protected Investors of America.

Calvelli’s early experiences in the industry help shape Open Trail’s client service philosophy and their approach to helping clients, he said. That philosophy calls for team members to listen attentively and make every effort to understand their clients’ needs and then be there as a partner to help them.

“Our Customer Relationship Management system is the key to executing on that philosophy,” he added. “We keep good records, so we never forget anything people have done. Before you make a call, you know exactly what's going on with the client. That high-touch approach is felt throughout our clients. They notice the difference in the attention to detail and genuine interest in what is going on in their lives.”

table 450Client education is another critical component in the Open Trail approach, whether they are new or existing clients. Advisors go through the entire process in detail with clients, reviewing reports and explaining procedures. The goal is to meet clients where they are and help them understand what is in their portfolios and how their money will be managed.
“In the beginning, we do a lot of education,” Calvelli said. “For new clients, you can get a feeling for what is going on in their lives and where they have been in their financial journey. Then we can really start to focus on what areas need attention in order to build their financial literacy.”

Calvelli said the younger partners in his firm, Lauren Maston and daughter Angelina Calvelli, have helped him recognize how much industry jargon can confuse and frustrate new clients. Lauren came from the hospitality industry in 2017 and Angelina came from a marketing background in 2019. Both arrived at integral times in the business and continue to make invaluable contributions to Open Trail’s current success. They push the envelope in developing thoughtful ways of building the firm’s client relationships and expanding their technological solutions.

“They did not know any of the jargon,” he said, “and they felt overwhelmed by it when they first started here. They've been great in those first meetings with clients where we need to talk about the topics clearly and they are empathetic to how dauting and unwelcoming the industry can feel. We definitely spend extra time on education, and we feel it is empowering for everyone involved.”

Financial education also involves making sure clients and prospects understand that not every financial advisor in the market is required to act as a fiduciary. Many do not realize that different types of professionals are held to different standards of conduct. Not all are held to a fiduciary interest to put the client’s interests ahead of the advisor’s or their employer’s.

“I've always felt that, when we meet with our clients, they honestly believe we do have their best interest at heart,” Calvelli said. “Even in situations where we are not acting as a fiduciary, we are still guided by the client’s best interest, so we do not do anything that puts our interests first.”

fin li mile
Clarifying the fiduciary role and their fee structure are among the important issues to address when consumers meet with a potential financial advisor for the first time. Calvelli said potential clients need to hear the firm’s entire process in clear terms, and to understand what will happen after they trust the firm with their investments.

“One of the first things new clients should ask is why the advisor is working in the industry,” he added. “You should also ask them what drives them to do what they do. Those answers help you understand how and why they got there. Maybe it was simply interest in the mathematics or the market analytics,” he continued. “Maybe their grandparents didn't have enough money, and they watched their parents try to help them as they got older, so they decided they wanted to make a difference in people's life. Those are two totally different answers, but I think an investor will learn more about the advisor and their motivations by asking point blank why they are in the industry.”

Calvelli feels that many clients are looking for a safe place to talk about something they may not feel comfortable talking about with most people. He feels his role is to establish those deeper relationships where he can learn about client’s values and goals. This helps him to do multiple layers of due diligence when it comes to the wide array of investment products that are available. He can help determine not only if the product makes sense to invest in, but whether it make sense for this particular individual in terms of their personal values and goals.

outreachAnother area that needs improvement is for the industry to be more inclusive, he added. Calvelli said considerations such as financial education and community outreach are important areas where the industry can interact with underserved segments of the public. So many people feel like financial advisors are only for a certain type of person. There can be a lot of shame in asking for help or exposing your finances to another person. Helping people to feel comfortable and open is more important than ever.

Over the last several years, Calvelli said he has been enjoying mentoring the younger partners of Open Trail. “One of the nice things for me is that I can pass this practice on to younger people who are inspired by the business. Through the many challenges 2020 presented, Lauren and Angelina have done a great job working remote and feeling connected to the clients this year. Our team continues to think about ways we can engage with clients, meet them where they are on their financial journey and help guide them from there. This year has highlighted the importance of our personable approach to financial planning. What we do matters greatly to our clients, and we want them to know that they matter to us as well.”

Calvelli added one of the greatest personal benefits from leading Open Trail has been taking advantage of philanthropic opportunities to help other people in the community. The company supports a number of charities and community foundations both through giving and volunteer work. Open Trail also assists many of their clients with extensive annual and legacy philanthropic planning.

“It has been an absolute joy and blessing to be part of that,” he said. “I never thought that having my own business would lead to a practice where I would be surrounded by so many like-minded peers and clients who have a passion for helping others. It just might be my favorite part of the job.”

For more information on Open Trail Financial Consultants, visit: opentrailfc.com

Registered Representative offering securities through Registered Representatives of Cambridge Investment Research, Inc., a broker-dealer, member FINRA/SIPC. Advisory services offered through Cambridge Investment Research Advisors, Inc., a Registered Investment Adviser. Open Trail Financial Consultants and Cambridge are not affiliated

 

Follow Us

Subscribe to Our Newsletter

What's Next, Updates & Editorial Picks In Your Inbox

© 2017-2019 Advisors Magazine. All Rights Reserved.Design & Development by The Web Empire

Search