According to a recent survey, only 40 percent of investors indicated that their financial advisor(s) clearly explained how they are compensated. In this same survey – the Envestnet Fiduciary Standards Study – 52 percent of investors did not believe that all financial advisors were bound to a standard requiring them to act in the client’s best interest. In the post-Great Recession era, these findings are exceedingly troublesome.
Brad Sherman, president of Sherman Wealth Management, serving clients in the greater Washington, D.C. metro area, has built his practice around improving those statistics.
Sherman is a big believer in full disclosure and complete transparency for his clients regarding his fees and how he works with their accounts. He’s also a big believer in total transparency from the client. “For the relationship to fully benefit the client, there has to be transparency on both sides of it,” Sherman said. “I have to provide a completely transparent structure so everyone knows what they are paying for what they are receiving – so that there are not any surprises to the client. On the other hand, the client has to fully disclose to me what their financial situation and goals are so I can make appropriate recommendations for them.”
He doesn’t have a firm minimum for his clients and in reality, most of his clients wouldn’t fit into the advisor marketplace niche requiring a quarter of a million to start. The bulk of his clients are his peers – people ranging in age from 25 to 40ish – who are starting careers, marriages and families. They are at the beginning of the accumulation phase of savings plans and many are buying their first homes.
“They are comfortable with me and with taking my advice, because I either have been just recently in the same situation or am still doing the same things they are,” Sherman said.
He started Sherman Wealth Management in January 2013 after spending 12 years working in financial services for other firms. He also had just completed his master’s degree in quantitative finance from American University, and it seemed like the appropriate time to hang out his own shingle. Since then, Sherman has taken on 50 clients and and wishes to develop relationships with additional clients seeking affordable, tax-efficient and customized advice.
Sherman said that his decision to become a registered representative with Lincoln Financial Securities Corporation Member SIPC gives him the flexibility to craft portfolios specifically matching the individual needs and goals of each client.
“Not all clients are the same,” he said. “That is why we customize every solution. Some of the bigger companies get into trouble by putting people into cookie cutter molds that may not be right for them. By representing Lincoln Financial in a fee-based model, there is no pressure on me to sell something that is not suitable for any of my clients.”
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