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Not Your Values

You can’t afford to make the mistake of thinking your values matter more than your clients’.

Carl Richards, 06/17/2013

This article originally appeared in the June/July 2013 issue of MorningstarAdvisor magazine. 

I imagine one of the big reasons you’re a financial advisor is that you want to help people make better decisions about their money. Part of that process involves understanding what’s important to clients and helping them clarify their goals.

During that process, it can be a challenge to stay focused on what’s really important to them versus what might be really important to you. The line between our values and their values is an important one to keep clear. When we cross that line, we run the risk of imposing our values on a client’s money, and that’s not our job. Let me give you an example.

I had a conversation with a financial journalist who publicly claimed that being a stay-at-home mom is bad financial planning and that the numbers prove it. I informed her that my wife, who chose to be a stay-at-home mom, had numbers that would disagree. My wife and I have a line item on our mental balance sheet where we put a high value on her being able to stay at home with the kids. We understand the “risk” financially, but the rewards outweigh the risk. That is not “bad” planning for us, because we understand the trade-offs. Now, this example may be dramatic, but the mistake of imposing our values on someone else’s money happens in more subtle ways all the time.

Education: You worked your tail off to get through a public university. Your client wants to pay for their kids’ Ivy League educations. They should have to work for it like you did, right?

Charitable giving: You contribute to a charity each year, but you notice that a client doesn’t ever give anything to charity. Obviously, your choice is “good,” and your client’s is “bad.”

Housing: You were raised to see owning a home as a wise investment and a fundamental part of being a responsible adult. Your client prefers renting and the flexibility to move every few years. You can’t believe he’s passing up the opportunity to earn equity in a home.

The author is a freelance contributor to MorningstarAdvisor.com. The views expressed in this article may or may not reflect the views of Morningstar.

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