Letter to clients from Barry Glassman, CFP®, President
By now, I’m sure you’re familiar with Greg Smith of Goldman Sachs who launched himself and his firm into the international spotlight by publishing his “resignation letter” in last week’s New York Times Op-ed.
His scathing article about the dubious business and sales practices at Goldman Sachs are more than just the rantings of a disgruntled former employee. He opened the door, and many of their clients’ eyes, not only to how Goldman Sachs conducts its business, but what their business culture is really like – and it’s not pretty.
I always thought that the difference between the ways my firm does business and that of Goldman Sachs was wide. But based on the revelations by Greg Smith, the difference is like looking from one side of the Grand Canyon to the other.
It cannot be surprising that some firms have and continue to abuse their clients’ trust for their own financial gain. While not surprising, it still pains me to hear about these practices because it is a black eye for everyone in our industry.
As a business owner and leader, I believe that both the structure and the corporate culture must align with a firm’s core values. When a firm like Goldman Sachs has the ability to have conflicts of interest, and their corporate culture takes advantage of their responsibilities by putting their own interests first, they no longer serve their clients.
I’ve received several calls from clients about the Op-ed – some to gossip and some to confirm the differences in their experience with us vs. those of Goldman Sachs’ clients. Mostly, they said they were grateful that we have a fee-only structure, a culture imbued with integrity, and a history of always putting our clients’ interests first.
What I said to those who called is simply this: We do not get paid more to recommend one investment strategy over another. We have no product to sell, no quota to achieve. As a fee-only firm, we are fiduciaries and are held to a higher standard of care. It’s important for those seeking financial advice to understand this.
Our worth lays in the value our clients place in us, in the advice and resources we offer to help them live more confidently knowing that they don’t have to worry that there may be other ulterior motives.
We invest a great deal of time and resources developing a firm culture that is dedicated to serving our clients and their families. My hope is that they always experience this level of care whenever they work with anyone at our firm.
As long as firms like Goldman Sachs place a higher value on their own profits rather than the interests of their clients, or Muppets as they like to call them, then there will always exist a chasm between our firms. The success of Glassman Wealth Services is aligned with the success of our clients. We wouldn’t have it any other way.