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A Fiduciary Approach: Keeping Clients Protected and Advisors Busy

As published 1/12/16

Providing a consistently special client experience hallmarked by always placing client interests first, is what differentiates successful registered investment advisors today.

“There is a lot of uncertainty in people’s lives and in the investment world today,” said Ben Marks, president and chief investment officer of the Marks Group Wealth Management based in Minnetonka, Minn. “Having consistency in how we communicate with our clients gives them a peace of mind and allows them to manage through these uncertain circumstances.”

Marks, along with a group of his peers, left UBS in November of 2008 to hang out their own shingle in the western suburbs of the Minneapolis-St. Paul area. The group was weary of the usual Wall Street game – selling financial products created and packaged by another subsidiary of the firm they represented.

He wanted clients who also shared his distaste for the cookie cutter approach dominating large financial firms, and he found them. Marks takes on clients with one to ten million dollars in investable assets. According to the U.S. Census Bureau, his locale is a ripe spot economically, with a median income of a little more than $80,000 per year. The bulk of his firm’s current clients are located within convenient driving distance from his office. Marks prefers that, because it gives him more of an ability to be readily available. In the seven years since opening, the firm has doubled its staffing and tripled its assets under management.

Marks starts each new client relationship with a systematic evaluation of the prospective client’s current investments and overall financial situation. He recently refined this process, branding it with the title, “My CloserLook.” Through the use of four short bullet points outlined at the landing page,, it gives prospective clients a heads-up on what they should expect in a portfolio review that includes an appraisal of the portfolio’s current worth and performance as well as an outline of all fees and expenses of the current investments. Prospective clients can go to to learn more about the process and to schedule an appointment. “When they (participants in ‘My CloserLook’) walk out, they have a better understanding of their portfolios in terms of what they’re doing well and where they could do better. It allows us to learn more about them and it allows them to see the type of work that we do,” Marks said. “Many of those CloserLook meetings result in them becoming clients.”

After becoming a Marks’ client, they can expect the use of investment advice developed in-house through the firm’s investment committee. Its members meet once per month to develop objective, forward-looking perspectives on the global economy that the firm calls, “Biases & Outlook.” This is a one-page document with anywhere from 12 to 15 bullet points that Marks says provide a basis for the decision-making in each of the portfolios where the firm and its clients are invested.

Marks doesn’t see this process ever being replaced by the plethora of online tools that his firm does use – but as a support versus a replacement for the discussions held by the investment committee and as an aid for educating clients.

“It is hard, if not impossible, to replicate that human element through online tools at this point,” Marks said. “No matter how far this evolution of online tools goes, I don’t think – even with artificial intelligence – that the human factor in investing can be replaced.”

Nor does he believe that a uniform fiduciary standard governing all players in the financial world under the same standard will be enacted any time soon. Marks noted that the Wall Street firms he left behind have far too much to lose for that to happen. “In my mind, it is impossible for those advisors (Wall Street types) who are in the business of selling the product created by another subsidiary of their firms to function in a fiduciary role,” Marks said. “How could they possibly be considered fiduciaries when they have such a clear conflict of interest? Wall Street will continue to push back on this, because for everyone to truly be a fiduciary, Wall Street would have to dismantle its current business model.”

What Marks does see in the near future is a significant test of how mandating the fiduciary approach might work.

In Feb. 2015, the U.S. Dept. of Labor proposed a series of fiduciary-like standards for retirement advisors. In pushing for fewer hidden fees and guaranteed education for those investing in retirement plans, the proposal calls for all financial advisors to act in a fiduciary manner. That proposal has yet to be enforced.

“That will be a good test of the industry’s ability to deal with standardization,” Marks said.

In the meantime, he remains focused on the firm’s investment strategies dominated by the use of bonds, stocks and cash: No annuities; no alternatives.

“We keep it quite basic,” Marks said. “But that is what works.”

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