Complete Representation: Do you really want to know?

Written by: Cale Dowell

What if I told you that the world you live in as a financial advisor might be a façade? 

If you've seen "The Matrix", you know that the story begins with the hero living a normal life. But there is a nagging awareness in the back of his brain that not everything in his world adds up. That there might be something more. Soon after, he is confronted by strangers who suggest that world he lives in is not as it seems. And he is offered a choice of two pills:

The blue pill will allow him to forget everything he’s seen. He’ll wake up in his bed, ignorant of the truth and believe whatever he wants to believe... or...

The red pill will open his eyes to the truth and he’ll be forced to confront a new reality.

If I told you that the world you live in as a financial advisor might be a façade and that the truth might dramatically change the way you operate as an advisor… would you really want to know?

If so, read on. If not, I suggest you stop reading this now!

The wealth management industry is changing. To not recognize that as an advisor is to live under a rock. The days of peddling stock picks are ending. Full transparency of fees is being demanded. Clients expect a value proposition that exceeds chasing alpha.

But in case you’re not aware, most of the wealth management industry is conflicted. Even though one may have their client’s best interests at heart, most of the full-service broker-dealers that financial advisors work for (and the contractual obligation they have to them) do not allow for complete representation of the client 100% of the time.

The short version of what this means is this: Regardless of your personal intentions, the platform you operate on may not allow you to serve clients without conflicts of interest.

Would you hire a lawyer to represent you that also represents the other side of the table? If we hold our legal affairs to such a high standard of representation, why not our financial affairs? In fact, law firms are required to inform you if a conflict of interest is present and, if so, is nearly always required to decline or withdraw representation.

Here’s one of many examples:

Did you know that mutual funds routinely pay for "shelf space" on broker dealer platforms? That you, as a registered representative of your firm, are restricted to represent only the products your firms chooses to be on its platform (i.e. The ones
that may be paying top dollar to be there)? 

This suggests the consumer might save money by purchasing the same fund (or better) through a different platform… one you don’t work for.

Which begs the question: Who do you think you work for? The name on your business card, or the name on the account you manage?

To use another comparison from “The Matrix”, the machines rule humanity through a dream world they’ve created that delivers a false reality-- so deceptively real-- that most people live out their lives without realizing it.

Similarly, many of the conflicted, large wirehouse institutions are analogous to “The Matrix”. They’re not bad… but a team of consultants that have never lived in the shoes of an advisor have carefully created a false reality where it appears you can do everything you would need to and want to do for a client. But as we continue to have more conversations with financial advisors, those who have been working long enough are (at a minimum) aware that not everything is as it seems.

But once you know the truth, it’s near impossible to go back. Thus, for many, the path of least resistance is often to avoid exploring the rabbit hole. But for others, at some point, no more rationalization will allow you to stay. You simply must get out.

And for those that want to get out, let me simply say this:

There is a whole world outside these institutions that allow for freedom and complete representation for both the advisor and the consumer. What if you could:

  • Truly represent the client 100% of the time?
  • Have access to open architecture which enables you deliver the best, lowest cost solutions to your clients?
  • Receive the resources that empower your capacity to scale your advisory business without your paycheck getting nickel and dimed?
  • Have meaningful impact in the lives of your clients?
  • Have fun doing it?

Making a change takes desire, effort and, perhaps, unlearning years of meticulously trained traditions of the way things are done inside a full-service broker-dealer. 

But now that you know the truth, what will you do? Do you really want to know how deep the rabbit hole goes?

If so, stay tuned. If you’ve ever wondered why it is so darn hard to scale your business at the wirehouse without inheriting another advisors book of clients, there is an answer.

Cale Dowell serves as Chief Operating Officer for Archetype Wealth Partners and resides in Houston with his wife Lynne and their two kids. Cale is seeking to create a paradigm shift in the way the financial services industry serves and impacts people. Archetype exists to help families thrive across generations.


Our intent in providing this material is purely for informational purposes, as of the date hereof, and may be subject to change without notice. This article does not intend to constitute accounting, legal, tax, or other professional advice. Visitors and readers should not act upon the content or information found here without first seeking appropriate advice from a trusted accountant, financial planner, lawyer or other professional.

Follow us on: