Markets Like This Are Why I Dropped My Securities License

Benjamin Haas |

What’s a securities license? It’s a license (a test actually) you have to pass to be able to buy and sell securities. It’s what makes someone “a financial advisor.” When I entered the business in 2006 with Ameriprise Financial, I had to get a securities license. 16 years later, running my own business, I deliberately “dropped it” and said “no more!”

Let me pause since I run the risk of confusing people – maybe even my own clients. Can I still give investment advice? Of course. Can I still implement that financial advice by managing client assets? Of course I can (through our Registered Investment Advisor, Great Valley Advisor Group). What’s different now, is that without a securities license, I cannot buy or sell anything that has a commission attached to it, that has a contract or some sort of “sales charge.” I can only get paid through the advice I give.

And markets like this are why I dropped my securities license. You see, when markets go down, people get worried. Fears are elevated. “How much do I stand to lose?” “Can my financial plan withstand that loss (assuming you have a plan to reference)?” “What will this mean for my ability to retire/stay retired/pass a legacy?” Maybe you have had these same questions; they are common at a point of stress. And what can happen at a time of stress? We can make mistakes. We can take our eyes off the big picture and make emotional decisions. We can believe something someone tells us, and trust their advice, when maybe they aren’t the person best suited to help us.  

What do these fears and potential mistakes around investment decisions have to do with a securities license? Perhaps nothing. But in my experience, fears can make us vulnerable, and financial advisors that make a living on product sales, might be able to make a really compelling argument for why you should buy their product. That product, they say, might calm your fears. That product, they say, is suitable for someone in your situation. That product, they say, will do you a lot of good. 

It's human nature to want to change something that feels like it’s not working. Fix it. Maybe that product will work for you. But…maybe it’s also possible that product is the exact opposite of what you need in your plan going forward.

I don’t have a securities license anymore because of markets like this one. I want anyone and everyone who works with us or is considering working with us to know we have a fiduciary obligation to give the advice that’s best for them, and only get paid to give that advice. And to me, having the ABILITY to sell products might make it harder for someone to believe me when I’m giving that advice and drafting plans. Products lead to transaction-based relationships. Advice leads to ongoing relationship. Which do you feel you need?

Be careful out there. Volatile markets are sometimes difficult to get through. If you aren’t sure you’re in the right place, getting the right advice, ask questions. Interview CFP professionals and ask how they get compensated. Find someone who will help develop a plan for you, not just pick a product. It’s more important now than ever before to ask questions and get unbiased advice. 

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