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Guest Column: personal Investing Jacob Deschenes | Owner Era Capital Management LLC Jacob is a licensed investment advisor and owns Era Capital Management LLC, a registered, fee-only investment management firm serving individuals, wealth advisors, and corporate clients throughout the United States. He uses contrarian methodology with uniquely-developed matrixex and mathematical and statistical analyses. Visit www.eracapitalmanagement.com.

Advantages of fee-only advisors You pay only for the services you receive

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earning about investing for most people often is not the first thing you want to do, or even think about with your finances. The world of investing is full of jargon, theories, and concepts which ultimately can become confusing.

I understand that researching investments is not an easy task and your time is more valuable elsewhere, therefore you choose to hire someone to do it on your behalf. The decision to hire a financial advisor brings a whole new set of questions to the forefront. Hiring a financial advisor can cause a considerable amount of anxiety; after all, it’s your hard-earned money we’re talking about here. It’s important to seek out somebody who thinks critically, treats this specialized work as a highly-skilled craft, and seeks always to improve. Although not all financial advisors are the same, it’s a general term that can mean many different things and come in many different forms. In the world of Financial Services, specifically Investment Services, financial advisors can come generally in two distinct forms: broker and investment 96 | BUSINESSPULSE.COM

advisor. The terms “broker” and “investment advisor” may seem synonymous, but they have significantly different motivations because of the way they get paid. Compensation tends to drive motivation, so it’s important to understand the difference between the commissions-based broker and fee-only investment advisor. How

The terms “broker” and “investment advisor” may seem synonymous, but they have significantly different motivations because of the way they get paid. your advisor is compensated is an important factor in determining what kind of advice you’ll receive. Building relationships means building trust and being up front and transparent is critical. The way one is compensated has a dramatic impact on the advice given. Motivations between parties can vary dramatically and may not always be aligned. Some people just want to close a sale and make some quick bucks. Some – whether

a broker or an advisor – choose to educate and inform and inspire, encourage you to reach higher, and provide a valuable service that develops into an ongoing process.

Fee-Only Financial Advisors and the Fiduciary Standard As a Fee-Only financial advisor – one small fee based solely on a percentage of assets managed – I charge my clients directly for my advice and the on-going management of their assets. Feeonly financial advisors must be completely transparent in our fees so you will always know what you are paying us. We receive no other financial reward from any other source. This means we never receive referral fees or commissions, and therefore have no incentive to push one product over another. We simply advise on what’s the best investment for your situation. This compensation structure aligns our goals with yours, which is to focus on the indented goal of growing your wealth. This unique way in which we are paid allows us to be objective in our advice and avoid possible conflicts of interest. As fee-only registered investment advisors (RIA) we are held legally to a Fiduciary Standard, which means by law we have to

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Business Pulse Magazine: Fall 2015  

The Publication of the Whatcom Business Alliance

Business Pulse Magazine: Fall 2015  

The Publication of the Whatcom Business Alliance