Transparency Reigns

Published On: October 11, 2024

Written by: Ben Atwater and Matt Malick

Quora.com says transparency means an organization cannot and does not hide or conceal anything. It means observers can freely and directly see what an organization is doing. It means there are no secrets and no lies.

Forbes.com says transparency fosters trust. Building happiness and engagement through transparency means updating clients regularly on strategy and current events.

Wikipedia.com says transparency is operating in a way easy for others to see what actions you perform. Transparency implies openness, communication, and accountability.

BusinessDictionary.com says transparency is a lack of hidden agendas or conditions, accompanied by the availability of full information required for collaboration, cooperation and collective decision making. It is an essential condition for a free and open exchange whereby the rules and reasons are fair and clear to all.

If you are reading this article from our home base in Lancaster, PA, you might be aware of an investment scheme that owes its investors significant amounts in back dividends that its managers promised, but never paid. Thousands of people are wondering if they will ever see their money again.

The combination of years of rock-bottom interest rates, the increasingly tribal nature of our country and skepticism of traditional investments is a con man’s paradise. There has never been a more important time for investors to be vigilant. Caveat emptor.

Remember, there is no such thing as a free lunch. Promises of low volatility, hard assets and “guaranteed” double-digit rates of return are concepts you should always examine with suspicion and extreme diligence.

We have always believed a major differentiator of our independent firm is transparency.

This begins with an investment philosophy that emphasizes individual stocks, bonds and strategically deploying index investments. In other words, you can look at your account statements and see exactly what you own. We do not “outsource” investment management to a third party, so our clients avoid a second layer of onerous fees.

We are 100% fee-only. The fees you pay us represent our sole source of revenue. We never accept commissions, payments from fund companies or finders’ fees from referral sources.

Our regular updates, like this one, come directly from us. We do not subscribe to a service and put our name on someone else’s newsletters. Our essays represent our views and our strategies that translate directly to how we manage money and provide planning for clients.

This level of communication is unique in our industry. Small advisory firms, like ours, often purchase content to get their names in front of clients. The largest of firms have strategists writing platitudes that rarely translate to actual clients and their accounts.

As a Registered Investment Advisor, we act (and the law requires us to act) in a fiduciary capacity. That means the Investment Advisors Act of 1940 mandates that we put client interests before our own and disclose conflicts of interest. In contrast, the Financial Industry Regulatory Authority (FINRA) only holds brokerage firms, those accepting commissions, to a lower “suitability” standard.

Hybrid firms, commission-based firms that have Registered Investment Advisor segments, can change hats throughout the day (even with the same client), acting in one hour as a fiduciary and another hour using the suitability standard.

We are committed to transparency, independence and to putting the interests of our clients ahead of our own interests. Our promise to you is that we will continue to embrace radical transparency.