by Mary Harris, CFP®
The wealth management landscape looked very different in the early ‘90s as I contemplated starting my own firm. Nearly all financial advisors dressed in three-piece suits and worked for large brokerage firms as stock brokers. These firms charged investors commissions to execute trades and then split these commissions with the stock brokers who recommended the trades.
From my perspective, conflicts of interest lurked everywhere in this transaction-driven world. The system appeared to be designed for brokers to sell stocks, bonds and mutual funds for over-sized commissions without the investor fully understanding the cost. The worst offenders conjure up images of Michael Douglas and Charlie Sheen in the 1987 film Wall Street. There had to be a better way. The fee-based registered investment advisor (RIA) business model emerged as a sensible alternative to the behemoth brokerage firms. RIAs provided an environment where advisors serve as fiduciaries and act in the best interests of their clients, helping to mitigate the conflicts of interest embedded in the traditional brokerage model. Advisors could now be paid by their clients for advice and insights on an ongoing basis, not by commissions of unknown amounts on transactions. At last, clients could clearly understand the costs associated with investing which brought the advisor and the client to the same side of the table, putting the clients’ interests ahead of all others.
On the back of the evolving RIA trend, I made the leap from a comfortable advisory job to self-employment. The Harris Financial Advisors’ shingle was hung in 1992 in a small, shared Torrance office space. The early days felt like hand-to-hand combat just to ensure survival and move into the future. Suddenly there was rent to pay, resumes to review, furniture to purchase and competing technologies to vet. The Harris healthcare plan resided in my bottom desk drawer and consisted of a small first aid kit and a large bottle of Excedrin. I clearly remember approaching the podium in the Torrance Marriott ballroom for our first investment seminar, wondering if anyone would show up. I was fortunate to meet Matthew Kuhn shortly after opening the doors. He seemed then what he turned out to be: smart and caring, with the highest of ethical values. Matt and I worked side by side during those early years, separated only by our part time secretary. In very many ways, we still do.
2017 marks our 25th year in business! Looking back, we have come a long way. We now have a team of 15 professionals and staff members with various, backgrounds, specialties and credentials. They are all dedicated to providing the best possible experience to each and every one of our clients. In 2016 we hosted over 30 educational events for clients and their friends in our dedicated education room. We continually invest in technology to enhance our clients’ experience and to deliver realistic solutions so clients can make informed, intelligent life decisions.
We feel privileged to have been on the front end of the revolution in the investment advisory business that served to elevate the clients’ interests above all others. As the baby boomers transition into retirement and the millennials transition to become the dominant demographic group, we are well positioned to serve investors and allow meaningful conversations to continue for the next 25 years.
Stay tuned for Part 2…25 Years and Counting