CASE STUDY: THE ADVISOR WHO’S DISAPPEARING ONLINE

Advisors have an opportunity to build trust by creating content. If consistent. If allowed. Some advisors are forced to erase their digital tapestries (or at least portions).

Here’s an email from an advisor we’ll call Heidi Hiding (not the real name).

"Could you please have my comment removed ASAP from the blog posting below , I[t] is a compliance issue."

Contacting sites is step six in how to disappear online.

Why The Concern?

The blog post asks does your advisor have these three elements of trust: chemistry, credentials and generosity. Heidi’s now deleted comment from 2010 said:

I'd like to think I have all of these qualities. I am a CFP, write a blog, volunteer on an alumni committee, routinely give free advice to those needing budgeting help or general financial advice at no charge. I read a number of blogs and financial sites where I put in my two cents as well. More info on my website.

Do you see a major cause for concern?

More Deletions

Where else has Heidi disappeared? That’s easy to figure out. Google makes copies of web pages (e.g., about Rogers Unlimited Internet) and the Wayback Machine does too.

I found traces of Heidi on sites like these:

• Will the fee-only financial planner model ever catch on? at Canadian Finance Blog
• Financial planner or salesman? at Retire Happy
• Financial advice or financial quackery? on Million Dollar Journey
• Claymore 1-10 year laddered government & corporate bond ETFs on Canadian Capitalist
• When to use a financial advisor at Oblivious Investor
• Create a retirement income plan at Boomer & Echo
• Zoominfo
• FoundLocally
• a listing of advisors on a company website
• Cold calls boot camp at Financial Blogger
• Name of cute babies (really!)

At the moment, Heidi remains visible at

• Know Your Financial Advisor with the $599/year Trusted Membership
• Wikidomo
• Personal website
• MoneySense directory of fee-only planners: Heidi says “I get the majority of calls from people who read Moneysense Magazine and have found me through their website. Some call come from my website, which focuses on fee-only and fee-based financial planning. I only get one or two calls a month. Doing the math, you can see the challenge of making a living as an independent fee-only financial planner.”

The Business model

Heidi’s revenue comes from

• fee-only financial planning
• selling products with embedded commissions
• investments: mutual funds, segregated funds
• protection: life insurance and health insurance

Other Comments

Here are comments from Heidi on different sites.

“… wtf is that supposed to mean? Is an FA [Financial Advisor] supposed to have a crystal ball and know exactly what to buy, when to buy it, when to sell it so that he can make so much money he doesn’t need clients? The majority of people DO need a Financial Planner, not a mutual fund/seg fund/stock salesperson.”

“I work through an MFDA licensed firm and for the last 2 years have been offering Fee Only Financial Planning. The biggest problem has been compliance issues from the MFDA. While the firm I work through supports my offering Fee Only planning the compliance hassles have led to comments from the management that the firm makes barely enough from my Fee Based business to "buy a coffee". I think this attitude will continue until the hidden commission model is abolished but I'm doing what I can in the meantime.”

“Investment allocation is only a small part of what a true financial planner should be offering their clients. I offer fee based and fee only services and some clients want investment advice but implement it themselves. Others opt for a fee for assets under management.”

“,,, since I began on concentratiing on being a Fee Based Financial Planner instead of a mutual fund order taker, I have attracted a more financially astute clientelle and have been able to put my CFP to good use doing estste planning, risk mangement, long and short term savings planning, budgetting, mortgage planning, oh and a little bit of investment planning as well.”

“The biggest challenge is finding clients. I think more people are getting educated about the need to use a fee-only planner but the question is how do you help them find you? Websites and other social media are the obvious way but I have personally had limited success. I do know you will need to have patience, perhaps you can generate income in other ways while you build the fee-based part of the business. I do this by doing tax returns, insurance sales and brokering the odd mortgage.”

The Last Word

Removing comments creates results like this where Heidi loses the last word:

Heidi: [comment removed by request of author] 

Commenter: Commission based = commissions
Fee Based = fees + commission.
Fee Only = fees

Also, to suggest that this eliminates conflicts of interest suggests a lack of understanding of that topic. You get paid to manage a client’s investments. What if they want to sell those investments to buy a house or start a business? Your pay goes down, and clients have to weigh that conflict when weighing your counsel.
I’m not suggesting it’s not possible to give appropriate advice while conflicted, but as an industry we need to stop acting like conflicts don’t exist. All models have them. 

Heidi: [comment removed by request of author]

What Happened?

After removing Heidi’s comment, I sent her email:

Me: Your comment is from 2010 and looked harmless. What was the compliance problem? Was the problem with your firm, MFDA [Mutual Fund Dealers Association] or IIROC [Investment Industry Regulatory Organization of Canada]?

Heidi: MFDA, I changed firms recently and when they did a search of my name on the web they found a number of blog comments. Since I signed on as Heidi Hiding CFP and provided a link to my website they considered this advertising. So my options were to have them all removed or to have compliance sign off on them. MFDA requires that Compliance signs off on all posts of this kind before posted? In future, I can comment as Heidi Hiding with no link to website and/or mention of my profession or anonymously etc.

What do you think of rules like that?

Links

• Where is your advisor’s blog?
• Do your advisors help with your financial literacy?
• The CBC’s hidden camera investigation of investment advisors
• image courtesy of Evert-Jan van Scherpenzeel

PS Disqus amalgamates comments on compatible blogs for those allowed stay visible (e.g., like this)