When FMT Advisory set up its continuation plan should we all die in a tragic bus crash one day (or some other horrible wipe-out scenario) we had to select back-up advisers for regulatory purposes to give our investors an option.
FMT Advisory could have chosen advisers from anywhere in the country to do the job. Yet, it took FMT Advisory just a few minutes to settle on three advisers that one day could be handling our family's, our friends, and our member-client accounts.
Narrowing down the search was very simple. FMT Advisory wanted back-up advisers that were not only fiduciaries (a legal obligation to put your interests first) but also had business models that put their clients first no matter what, had fair-costs, and were very competent. In other words, FMT Advisory looked for registered investment advisers that were exactly like our own model.
That criteria—a legal obligation to put your interests first no matter what, low costs, and competence— eliminated 96% of ALL advisors. That stat is backed up by Cerulli Associates, a data analytical firm.
If you ever get confused, here is a definitive list of all the charlatans you should avoid in no uncertain terms:
1. Anyone at a traditional brokerage firm. No exceptions. These are your big wire houses and local investment chains (do you know who we’re talking about, Mr. Jones?). FMT Advisory’s Chief Investment Officer, Nicholas Green, started in the industry at one of these places and he ran from them as fast as he could. Trust us you do not want to enter any of these doors. These companies are such bad choices for you Nicholas Green could write volumes and books about it. And if you want examples just call him. FMT Advisory personal would never, ever, put our money in any of these places let alone send member-clients there should we all die one day.
These folks are almost always conflicted, are ridiculously expensive, have almost no transparency, and should be completely shunned — no ifs or buts please. The turnover of the advisors is astronomical as well because of sales quotas, sales pressure, and the conscience of good people that eventually prevails over the evil empires they work under, which eventually makes them capitulate. FMT Advisory wouldn’t send our dreaded mother-in-laws there, and we certainly would never send you there, either.
2. Anyone that is an advisor at a bank , credit union, or uses a bank as a custodian. These people are pure salespeople that on top of a myriad of conflicts of interest, the people working there really don’t know the difference between preferred stock and livestock. Loaded mutual funds, 12-b1 fees, annuities and insurance products, high fee accounts, and everything else that makes us sick to our stomachs will be on your menu. You will complete prey working with these folks. Simply avoid them and all that junk by avoiding anyone associated with a bank at all with your investment money.
3. Anyone that says they are “independent” but yet have this disclaimer at the bottom of all their material, “securities offered through XYZ firm.” This is typically a hybrid model and these “independent” folks aren’t Fiduciaries, have a lot of conflicts of interest, aren’t investment thinkers generally, and sell mostly products not services to meet their, not your, needs. When it says “securities offered through XYZ firm” on an advisors business card or any other material it means the advisor is holding a broker license so they can sell products via commission. We never trust folks that need to put food on the table by way of commission, and they are so 1980s anyway.
4. Anyone selling insurance products as investments or mutual fund salesman for a specific company (for e.g, if you work with someone at Fidelity, you will end up with all Fidelity funds even though there are likely better alternatives and you will pay too much on top of it).
Simply avoid all these shucks at ALL costs, folks... And stick to trusted Fiduciaries like us.