Listen to your Periodontist

I was at a wealth management event last week when I bumped into one of the industry’s thought leaders. We were chatting, and he said he gets asked a lot about Sanctuary.

My ears picked up, so I asked him what he said about us. Answer: “Sanctuary is the periodontist for wealth advisors.”

 WHAT?

It wasn’t quite the answer I was expecting. Nor a serious contender for our new marketing tag line.

The periodontist, he said, is the person who breaks the bad news that your gums are on fire and you’re going to need surgery. Unfortunately, he said, most ignore that advice unless they’re bleeding or their teeth are falling out. The inclination is to deal with it later.

Yet, as soon as the doctor’s warning turns into a full-fledged dental crisis, the first person you call is the periodontist.  That specialist is the only one who can fix the problem.

Sanctuary, he said, plays the same role for advisors. Many Wall Street advisors realize someday they will need to leave their firm. It’s a festering worry about their future, but things aren't quite bad enough right now to opt for independence.

But then a merger comes (bacterial plaque). Or the payout goes down (tooth ache). Or your company forces you to offer products you don’t believe in (lost molar). Or the technology platform blows up and drives away your clients (root canal).

My friend was correct. Sanctuary is like the periodontist for elite advisors. Many of these advisors know they should be doing something, but are instead standing pat. The recent story in InvestmentNews about the dearth of breakaway advisors is Exhibit A.

Are you a Periodontist?

While Sanctuary-as-periodontist is an apt analogy, the same idea holds true for wealth advisors and clients.

A responsible wealth advisor looks at a client’s portfolio and suggests that a risky portfolio needs to be addressed. The client responds by saying, “My portfolio was up 15% last year. Why should we change?” Then nothing happens until there is a traumatic market event.

In fact, most investors still haven’t gotten back into the market because the financial crisis was so painful. The result is that many are afraid, but that could be just as disastrous if they miss the next rally.

Listen to Your “Periodontist”

There are a lot of well-meaning advisors we don’t listen to in our lives. The list includes our spouse, parents or friends. The lesson learned after we've ignored good advice is that we should have listened. Distraction or hubris is usually the culprit.

The moral of the story: Listen to your “periodonist” before your teeth fall out!