{"id":679,"date":"2011-01-18T16:39:05","date_gmt":"2011-01-19T00:39:05","guid":{"rendered":"\/blog\/?p=679"},"modified":"2022-01-11T17:12:49","modified_gmt":"2022-01-12T01:12:49","slug":"dont-choose-service-over-performance","status":"publish","type":"post","link":"https:\/\/www.wealthfront.com/blog\/dont-choose-service-over-performance\/","title":{"rendered":"Don\u2019t Choose Service Over Performance"},"content":{"rendered":"<p>Listen to any investment related commercial and you\u2019re almost guaranteed to hear a sales pitch that promotes service rather than performance. You\u2019ll hear a lot of buzz phrases like \u201cwe listen to you\u201d, \u201cwe\u2019re here for you\u201d, and \u201cyou can trust us,\u201d but you\u2019ll hear nearly nothing about returns.<\/p>\n<p>We believe the investment industry is conditioning people to focus on service because it\u2019s not confident in its ability to generate outstanding returns. In September 2010, Wealthfront commissioned a survey through leading market research firm\u00a0<a title=\"Harris Interactive\" href=\"http:\/\/www.harrisinteractive.com\/Home.aspx\" target=\"_blank\" rel=\"nofollow noopener\">Harris Interactive<\/a> to better understand how the general population felt about the skill of its financial advisors:<\/p>\n<ul>\n<li>Only 6% of U.S. adults said they \u201cstrongly agree\u201d that financial advisors know how to consistently outperform the market.<\/li>\n<li>Even more shockingly, only 3% of U.S. adults with a financial advisor said they \u201cstrongly agree\u201d that financial advisors know how to consistently outperform the market.<\/li>\n<li>59% of U.S. adults said it is \u201cessential\u201d that a financial advisor offers excellent customer service, while only 17% of all U.S. adults said it is \u201cessential\u201d that a financial advisor demonstrates an ability to consistently beat the market.<\/li>\n<\/ul>\n<p>Unfortunately many financial advisors have embraced this new belief that they can completely ignore performance. We\u2019ve even come across a number of financial advisors who confidently tell us performance doesn\u2019t, and shouldn\u2019t, matter. We think this is unacceptable.<\/p>\n<p>Financial advisors have a legal obligation to act as a fiduciary to their clients. A fiduciary is one who is \u201coften in a position of authority who obligates himself or herself to act on behalf of another (as in managing money or property) and assumes a duty to act in good faith and with care, candor, and loyalty in fulfilling the obligation.\u201d How can maximizing risk-adjusted returns not be part of a <a title=\"SEC's view on the fiduciary standard\" href=\"https:\/\/www.wealthfront.com/blog\/sec-standard-of-conduct\/\" target=\"_blank\" rel=\"noopener\">financial advisor\u2019s fiduciary responsibility<\/a>? Sophisticated institutions would never ignore returns or choose service over performance. Why should you?<\/p>\n<p>To me it\u2019s analogous to choosing a surgeon based primarily on bedside manner. I don\u2019t know about you, but I want the surgeon who\u2019s going to do the best job fixing me, not the one who makes me feel emotionally comfortable. Service matters, but it shouldn\u2019t be the number one basis on which you choose your financial advisor.<\/p>\n<p>Financial advisors have a very important role to play in helping individual investors optimally achieve their financial goals. Make sure you choose one who proudly volunteers client performance, not one who avoids the topic at all costs. Making the wrong choice might cost you.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Listen to any investment related commercial and you\u2019re almost guaranteed to hear a sales pitch that promotes service rather than performance. You\u2019ll hear a lot of buzz phrases like \u201cwe listen to you\u201d, \u201cwe\u2019re here for you\u201d, and \u201cyou can trust us,\u201d but you\u2019ll hear nearly nothing about returns.<\/p>\n<p>We believe the investment industry is conditioning people to focus on service because it\u2019s not confident in its ability to generate outstanding returns.  In September, Wealthfront commissioned a survey through Harris Interactive to better understand how the general population felt about the skill of its financial advisers.<\/p>\n","protected":false},"author":4,"featured_media":7226,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[1282],"tags":[1300,1287,1301],"coauthors":[99],"class_list":["post-679","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-investing","tag-fiduciary-standard","tag-financial-advisors","tag-investing-mistakes"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v24.3 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Don\u2019t Choose Service Over Performance | Wealthfront<\/title>\n<meta name=\"description\" content=\"Financial advisors help investors achieve their financial goals. Make sure you choose one who takes performance seriously and delivers returns.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.wealthfront.com/blog\/dont-choose-service-over-performance\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Don\u2019t Choose Service Over Performance | Wealthfront\" \/>\n<meta property=\"og:description\" content=\"Financial advisors help investors achieve their financial goals. Make sure you choose one who takes performance seriously and delivers returns.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.wealthfront.com/blog\/dont-choose-service-over-performance\/\" \/>\n<meta property=\"og:site_name\" content=\"Wealthfront Blog\" \/>\n<meta property=\"article:published_time\" content=\"2011-01-19T00:39:05+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-01-12T01:12:49+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.wealthfront.com/blog\/wp-content\/uploads\/2017\/01\/timing02.png\" \/>\n\t<meta property=\"og:image:width\" content=\"1472\" \/>\n\t<meta property=\"og:image:height\" content=\"530\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/png\" \/>\n<meta name=\"author\" content=\"Andy Rachleff\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@Wealthfront\" \/>\n<meta name=\"twitter:site\" content=\"@Wealthfront\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Andy Rachleff\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.wealthfront.com/blog\/dont-choose-service-over-performance\/\",\"url\":\"https:\/\/www.wealthfront.com/blog\/dont-choose-service-over-performance\/\",\"name\":\"Don\u2019t Choose Service Over Performance | Wealthfront\",\"isPartOf\":{\"@id\":\"https:\/\/www.wealthfront.com/blog\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.wealthfront.com/blog\/dont-choose-service-over-performance\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.wealthfront.com/blog\/dont-choose-service-over-performance\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.wealthfront.com/blog\/wp-content\/uploads\/2017\/01\/timing02.png\",\"datePublished\":\"2011-01-19T00:39:05+00:00\",\"dateModified\":\"2022-01-12T01:12:49+00:00\",\"author\":{\"@id\":\"https:\/\/www.wealthfront.com/blog\/#\/schema\/person\/8f4437d81fe6ce66286d1f93856a71f4\"},\"description\":\"Financial advisors help investors achieve their financial goals. 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