Practical analysis for investment professionals
30 May 2014

Why Investment Managers Are the Good Guys

Posted In: Philosophy

My son, Jackson, is almost six, and we are starting to have conversations about what Daddy does for work. Since he is also at the age when we spend an inordinate amount of time talking about good guys versus bad guys — particularly in the context of Star Wars — this also tends to bleed over into other areas. Of course, it got me thinking about where we, as an industry, stand. He is not yet old enough to read the papers, but that age is certainly coming.

First, we have to admit that now is not the best time to be a financial person, at least when it comes to the public’s perception. Wall Street bankers, high-frequency traders, hedge fund and private equity guys — well, they need some sort of a PR fix, to put it mildly. Second, we have to admit that there are bad guys in our field, just as there are in any industry or profession.

Given those caveats, though, I think that the people I work with — not just at Commonwealth Financial Network, but in the financial advisory and money management community at large — are the good guys (“guys” meaning both men and women). And so here’s why Daddy is a good guy, in a context six-year-olds can understand.

Good guys help people. Money managers help people avoid poverty, send their kids to college, achieve their goals, and retire comfortably. That really is what we do. All of the investing, market analysis, and so forth are a means to that end. I remember talking years ago with a financial adviser about what made his job worthwhile. He said he couldn’t think of anything better than sending clients off on their dream trip to start their retirement. I have heard similar statements many times over the years.

Good guys are honest. The best managers understand and share the limits of what they can and can’t do. We are largely — although unfortunately not entirely — past the days of Ponzi schemes and unrealistic promises, and advisers are realistic about what we can do. By helping clients set realistic expectations and hold to their plans, we also help clients be honest with themselves. Finally, and especially with the CFA Institute, we establish the right way to do things and create and enforce standards that matter. Honesty is about more than personal conduct; it is also about helping the public at large — something CFA Institute and the CFA charter were explicitly created to do.

Good guys are responsible. Part of responsibility is diligence, and part of responsibility is accountability. Few industries are as accountable as ours, with monthly and quarterly statements complete with independent benchmarks. Few industries present the same opportunities for diligence — for really doing the hard work necessary and working to make sure that clients are served. I can’t speak for every money manager, but the ones I know are doing their jobs. Again, CFA Institute was created to support diligence and accountability and also to drive continued improvement in those areas.

Good guys plan for the future. An essential part of taking care of people is planning for the uncertain future, which is at the heart of what we do.

You could argue, and many do, that the high levels of compensation in the financial industry disqualify us from “good guy” status.  Many doctors, who make the same and more, would disagree.  Many athletes and entertainers, also well compensated but active in charity work, might also disagree.  Compensation does not determine why you do what you do, and trying to do the right thing and to better people’s lives are the core of our profession and what we do every day.

Personally, I am proud to be associated both with my profession and with Commonwealth and its people, and I know many other companies can say the same. We do good work, and we are the good guys.

To read more about what CFA Institute is doing to make the financial industry better, visit our Future of Finance portal.

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Please note that the content of this site should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute.

About the Author(s)
W. Bradford McMillan, CFA, CAIA

Brad McMillan, CFA, CAIA, is the chief investment officer at Commonwealth Financial Network, a private independent broker/dealer, where he also leads the retirement consulting division. McMillan holds the CAIA, MAI, and AIF professional certifications. He holds a BA from Dartmouth College, an MS in real estate development from MIT, and a BS in finance from Boston College.

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