July 12, 2023
SETTING THE STANDARD
by John Purrington, CFP®
After college, I was an early employee for a software company which produced software for tracking investments. I loved helping our clients, being part of building a successful company, and learning about a great profession. Many of our clients in the early 1990s were a new breed of financial advisors. They were ‘fee-only’ meaning that they received no commissions, were compensated only by their clients, and focused primarily on financial planning and holistic client wellness.
Thirty years later, it is hard to appreciate how radical a business model shift this was. It flipped the industry compensation model on its head. It put the buyer first, not the seller. It shifted the focus from transactions to relationships. It set a new standard for serving clients. And it inspired me.
By the mid-2000s, when it was time for me to leave the software world, I studied to become a financial planner and searched for a firm that embraced the fee-only business model because it was (and still is) the highest standard for serving clients. I was fortunate to find Walt Sheffield and Jeff Miller who shared my commitment to putting the client first.
In 2009, we introduced our Fiduciary Pledge to clearly articulate our Fiduciary Duty to our clients.
Armor’s Fiduciary Pledge
We will always put the clients best interests first, ahead of our own and those of our firm and its employees. We will always act as a fiduciary.
We will act with prudence; that is, with the skill, care, diligence, and good judgment of a professional.When selecting investments, we will act as the client’s agent, seeking the best investments at the best prices at all times.
While neither we nor anyone can promise superior investment returns, we will provide impartial advice.
We will always be truthful with our clients, providing full and fair disclosure of all important facts, including our compensation from all sources, as well as fees we pay to others on our client’s behalf.
We will always seek to avoid conflicts of interest.We will fully disclose any potential conflicts and place the client’s interest first at all times.
A Fiduciary Duty is a legal concept which traces its history to English common law and Roman law. Simply put, a Fiduciary Standard of Care represents the highest level of care including a duty of care and a duty of loyalty. It is a Principles Based standard of conduct (as opposed to a Rules Based standard) meaning that a Fiduciary is bound to act in the best interest of his or her clients whether or not there is a specific regulation covering a situation.
In the last ten years, well-meaning regulations have narrowed the accepted definition of Fiduciary to be rules based and have watered down the ‘duty of loyalty’. Over that time, I have written numerous articles bemoaning the misuse of the term ‘Fiduciary’. But we continue to stick to our Pledge regardless of the changing definitions.
While a lowering of the standard has allowed more people to claim that they are acting as fiduciaries, Armor has followed the tradition of those early ‘fee-only’ firms and focused on elevating our standard of care and making meaningful differences in the lives of our clients.
Because we are a boutique employee-owned firm dedicated to multigenerational relationships, we have committed to a longer ‘business time horizon.’ This commitment has allowed us to intentionally structure the business to be more client focused; to set a higher standard.
We limit the number of clients with which each advisor works to well below the industry average. This allows us to focus on building deeper, longer-term relationships with our clients.
We do not receive commissions or sales fees which might otherwise bias us towards short-term decisions against the client’s best long-term interest.
We have invested in talented young professionals who have enhanced our services and ensure that Armor will continue serving clients long after I retire.
Through an annual meeting review process and quarterly financial planning focus areas, we have committed ourselves to true ‘proactive planning’ so that we can anticipate and plan ahead for client needs.
We have leveraged partnerships with top firms in the industry to give us all the resources of larger firms while still remaining 100% independent and client focused.
All of our financial planning and investment management is done in our office by professionals who know and work directly with our clients.
We have committed ourselves to our Client Experience Pledge to articulate how we work to inspire trust in every client interaction.
Armor’s Client Experience Pledge
It is our highest calling to earn our client’s trust each and every day.
Trust that we are always working in the best interest of our clients. Our business is built from the ground up to remove conflicts of interest; we are only paid by and report only to our clients.
Trust that we are knowledgeable in our profession. With five CFP® Professionals, two CFA® Charterholders and a CPA and over 50 years of experience among us, we have a team uniquely qualified to work on the behalf of our clients.
Trust that we will always take the time to listen to and understand a client’s unique situation and to craft the best solution possible.
Trust that we will deliver what we commit to deliver, every time and for years to come.
In an industry where it is sometimes hard to distinguish talk from action, we are committed to serving clients with the highest standard of care. We listen to our clients and will continue to innovate to raise the standard.—J. Purrington