The overused cliché to this is, “Doing what’s in your clients’ best interests.” How do we know how to do that? There is only one way. In fact, when my dad, Bill Tillotson, went into the investment field with my grandfather, Art Hefren, he would often ask: “How can you recommend investments if you really don’t know someone’s situation?”
Tailored to the Individual
Doing what’s right for our clients, to us, also means creating individually tailored portfolios. It has to be set up for what that person needs based on our discovery process. This is not complicated, and, unfortunately, it’s not done as often as it should be done at other firms.
It is about our knowing you to determine what is in your best interests – what is important to you, what you are trying to accomplish, what you have already done, etc. We would be remiss as Hefren-Tillotson advisors if we didn’t know where you are today, where you are trying to go and when you want to get there.
How can we possibly advise you properly if we don’t have a clear understanding of your investments, taxation, estate planning, and what market risks or other risks you are subject to? Additionally, this should be a repeatable process. When it comes to the process, it is not one thing for him and another thing for her.
Our Hefren-Tillotson advisors, without exception, have their clients’ best interests at heart, and do the best for them because they know their clients and what they need and want.
We Don’t Want the Message to Get Lost
The issue today is in the regulations. Apparently, ‘doing the right thing’ means providing the lowest cost. But I see it as what we control and what we don’t. We control our behavior and how we react to something. We don’t control the markets and other things.
When we know what a client’s goals are, whenever the market dips we’re back to talking about why the market is doing this, and why we are set up the way we are. Doing the right thing is keeping clients from being fearful and making bad decisions during stressful times.
One client’s account of $1.660,000, on February 16, 2020, decreased to $1,318,000 in March. While he and his wife do take out a sizable amount of money to live on, they left the account as is at the start of the pandemic. Past performance does not guarantee future results, but one year later their account is $1,862,000. We know what they need and that drives our allocations. It is not about timing the market, or having the lowest cost, or even the best performance.
When Our Beloved Clients Err in Judgment
Speaking of behavior, when a client is on the top wrung of either being mistaken or making an error in judgment, the one thing we would never say is, “You’re wrong, Mr. Client.” This reminds me of one of my dad’s quotes from “Lessons From the Life of Willard Tillotson,” an encapsulation of his personal lessons, lessons about character and business lessons. He’d say, “Don’t back anyone into a corner because they are going to fight you.”
So, I would say: “Our philosophies are not matching up. Maybe we are not a good fit for you.” Or, I say, “Your decision of whether or not to become a client of Hefren-Tillotson and to work with us is going to be based in large part on your acceptance and your agreement with our philosophy.” I then explain our philosophy.
If they do not agree with it, because they think one way and I think another way, it doesn’t mean one of us is right and the other one is wrong. It might mean, however, we are going to have a difficult time working together because investing is a long-term proposition and so is building a relationship.
Always Tell the Truth. You Never Have to Wonder What You Said
This was one of my favorites. A lie is the quickest way to lose someone’s trust. I cannot say something is good when I feel it isn’t. With all the noise about GameStop, Bitcoin and Tesla, which I often get asked about, I’ll answer with a question, “How could you want to invest in a currency that fluctuates and be ok with it?” In doing the right thing for our clients, my advice is to stay away from such investments.
As a company, we have avoided a lot of bad investments due to a lack of understanding about them. If we were recommending something speculative, I’d tell them what my dad said: “A year from now we could either look like a hero or a bum.” Our goal is to buy, or add to something attractively valued. And if it is overvalued, own less of them.”
Basically, people will admit they aren’t very good at managing their investments and their financial situations on their own. That’s why they need our help. Hefren-Tillotson advisors that generate the most revenue manage the largest amount of assets and serve the most number of households. And our fees, by advisor, are very low relative to our industry.
A vitally important part of our job is to help as many people as possible. If we’re the best solution, then more and more people need to know. As my grandfather, Art Hefren, said, “Always do what’s in your clients’ best interest without thought as to what you’ll be paid and you’ll be just fine.” It makes a lot of sense.