The Montrose Daily Press spoke with Howard Davidson, a financial services agent in Montrose, who discussed his background as a financial adviser and gave some insight on the industry.
What was your mission from the outset as a financial adviser?
Davidson: “To provide straightforward advice to clients, without jargon, and presenting their options to them in a way that they understand. The financial arena in terms of somebody investing, whether you have a traditional IRA, Roth IRA, a 401K where you have a straight investment account, and how much risk you’re running, frankly, for most people, it is really quite puzzling and difficult. Many clients I start talking with I find have been filing the issue in what I call the too-hard-drawer for a long time. It’s kind of like, ‘I know I need to be thinking about my retirement funding, I know I need to be planning for the future, but it’s all too hard, and full of jargon and phraseology that I don’t understand, and it’s real money, I could lose that money so I’m scared about it.’
“So my aim, always, when I’m dealing with clients is to provide straightforward advice to them. Giving them the options, setting out those various options, here are the risks, and making sure that they really, really understand what they’re doing before they do anything. And always putting their interests absolutely first.”
You sold your insurance business back in December. What led you to make the switch to financial advice?
Davidson: “Well, historically, I was actually in the financial advice business before coming to Montrose. I was working with Morgan Stanley, a brokerage firm, and worked all over Asia doing different financial transactions. Honestly, I didn’t think there would be a huge demand for financial advice here, so I opened the insurance business as a new business for me in January 2011. I was really developing, and did develop a very good insurance business, but along the way, I found out there was a lot of need for financial advice from clients in Montrose and frankly, in other parts of the country. What has happened over the nine years that I’ve been doing is that I started working with people, and they contact cousins, aunt, friends, and I now have clients in 16 states all over the U.S. that I talk to and give financial advice to.
“The financial advice business is more my experience and background. As the financial advice side of the business got busier and busier, and I was doing more and more business, the insurance side, I felt almost guilty for my insurance staff because I wasn't giving it as much attention as I wanted to. So when the opportunity came in December  to merge my insurance agency with another insurance agency in Grand Junction run by Jesse Dryer, I took that opportunity… it was a good move for all concerned, but it meant that I could concentrate 100% of my time on the financial advisory business.”
What are some things people should know before seeking financial advice?
Davidson: “One, I would say, very much meet with the person you’re considering working with because it’s a personal business. It’s a case of feeling confident with the person you’re talking to, and that’s a matter of technical knowledge, the person you’re talking to is properly qualified, but apart from that, you also want to know that they can talk your language, that you can have a relationship with them. You also want to know they’re going to be available to you. You don’t want where you’re dealing with one person, and then whenever your account settles down, suddenly you’re dealing with somebody else who is a more junior person. You want to make sure you’re going to continue to have the advice and service you are looking for. So you’re looking for a commitment from the financial advisor that they are going to be available when you need them, and that you can get the help you need.
“Have a meeting with the person who you’re thinking about being your financial advisor. Do you like the way they talk? Do they explain things in a way that makes sense to you? So there’s the technical aspect of it, the person has to be qualified and good, but secondly, you have to be comfortable working with a person.”
How do you advertise your service?
Davidson: “Well, actually, the financial advice business is unusual. It’s very, very controlled by a group called FINRA, which is the Financial Regulatory Authority, and financial advice is a federal business, so in other words, it’s regulated by FINRA. There’s all kinds of restrictions. To give any kind of financial advice, you have to pass the right exams and have the right qualifications. That’s a given. But also, you can’t just go out and advertise. You can basically make it available and let people know that you exist and that you're there. But if you say, ‘hey, come to me, I’ve got a cheap discount for eldelry citizens, or I’ve got a foolproof way to make money for you’, that’s illegal. So, frankly, the best way this business grows is by word of mouth.
“So, basically, I’m dealing with a client, and at the end I might say, ‘if you find the advice helpful and you find our relationship is good, feel free to mention my name to other people that you know. Whether that’s neighbors, friends, or relatives, or anybody you think I could help, feel free to let them know’. That really is how the business has grown, by word of mouth recommendation, which is almost always the best.”
What about financial advice makes it unique?
Davidson: “You’re basically dealing with somebody’s money, and that’s what’s unique about it. Whenever I’m dealing with selling somebody a product, even if it’s insurance — why do you have insurance? Because if you have a crash, you don’t want to be liable. You want to make sure the insurance company pays. If your house sets on fire, you want to make sure you get your money back. The unique thing about the financial advisory business is that we’re dealing with your money, your savings, and people are very emotionally attached to their savings and to the money they’ve got in the bank because that's their future, that’s their retirement planning. That’s all tied up with their investments.
“The unique thing about the financial advisor business is you are dealing with a very intimate part of a client's life. Their money is important.”