Harry Golden Selfridge was the founder of the Selfridge department store in London in 1909. He was born in Wisconsin and raised in Michigan by his single mother. He was a young 12-year-old when he started his first retail job. He stuck with retail for his entire career and climbed the ladder, eventually owning a store in Chicago and then becoming famous in London. When they use the word ‘magnate’ to describe you, you’ve probably made it. He did so well in London they dubbed him the “Earl of Oxford Street”. Success would be the right word from a business perspective if they call you an Earl of anything. It sounds like he was a leader, too. Our modern leadership books could start with quotes that are attributed to him. Things like ‘The boss says Go, the leader says Let’s Go’ and ‘The boss says I, the leader says We’ would fit well in today’s world. You can also thank Harry for the ‘___ days until Christmas’ slogan you’ll see in a few months. He was the first to use the slogan, while becoming a partner at Marshall Field, that everyone including your local Target has copied ever since.
The idea of shopping for necessity? Selfridge wanted you to shop for pleasure. You don’t know his name, but you certainly have heard his most notorious thought that ‘The customer is always right.’
You also know after 125 years that he was wrong. We’ve written books about the fact that it’s wrong, we’ve given Ted talks on why it’s wrong, and we’ve even built business models that are the antithesis of ‘tell us what you want and we’ll do it’. These new business models essentially say ‘You have no idea what you want. We’ll tell you what you want’. See also: You’re wrong Mr. Customer, we have a better way. You want proof? Zero chance you woke up 12 years ago and said ‘I think I’ll make my coffee with Horchata and Oatmilk today while I put this little thing in my ear to listen to my morning meditation.’
Always and Never are really hard words. Unless you’re talking about the Cleveland Browns always having a new quarterback or never becoming a Cleveland Browns fan, we should probably refrain from using those words when we can.
We love our clients. We don’t like telling them they’re wrong, but sometimes they are. Sometimes our duty is to tell them they’re wrong. It’s ultimately their money and their decision, but we have an obligation to tell them what and why we think the way we do. We were forced to have that conversation with someone that was referred to us this past week. After our initial meeting the conversation went like this:
‘I was thinking originally to give you a sum of money to invest, and let’s monitor the progress before I show you everything else that I have.’
Our response:
‘As I mentioned in the initial meeting, we’re financial planners that also give investment advice. We do it in that order for a reason. We believe in looking at the entire picture.
Very few of our relationships are with folks that say essentially ‘here’s a piece...go invest it and we’ll see how you do’. We’re not good at those types of relationships. We’re not afraid of them...they just rarely work to your benefit…either the advisor is pushing the envelope to ‘prove’ they’re good enough or they’re building the same thing someone else is building. Both are dumb ways to take unnecessary risk.
Admittedly the thing that people need the least amount of help with is returns/stock picking. We’ve got great analysts and portfolios here at Baird so we think we can add some value in this regard but it’s not as much as people think. As you’ve seen..at times a robot can do that for you.
What you actually need is everything else that we bring to the table…advice…on where to put money, what risks are part of your puzzle, estate stuff, different account types and the pros and cons of them. Tax help from us being integrated with your CPA...both with a thought for today and what awaits you down the line.
We’re fine managing a piece of the puzzle as we get to know you…we’ve done that for a few clients, but that piece isn’t going to be ‘if their piece beats this piece, I’ll give them more’. That’s not how we work. If we are managing just a piece of the puzzle it’s still imperative that we know what else is happening around the piece that we’re managing…thus the need for financial planning and a financial plan. The vast majority of our clients start with a financial plan in which we make recommendations on their total picture and then they decide if they want to use us for any of those recommendations.
We’d certainly prefer…and it’s easiest when we are a part of everything because then we’re thinking about it and looking at the whole picture every day, but we can progress however you’d like.
What we won’t do is manage a piece of the puzzle without at a minimum seeing and understanding everything that you have.
We’re happy to help however you want us to, but it all starts with us seeing how everything is allocated right now and then letting us make some recommendations.
Sorry Harry Selfridge. The client was wrong. It’s a bad way to build an investment portfolio. Planning is better. Someone needed to tell him. I still want to work with him and help, but I don’t want to do it his way.
Goals and objective based financial planning is the way we are telling you what you want. You’re involved in the process. You are providing the goals and objectives. It’s your overall puzzle we’re putting together. It’s tailored to you, but the process of building it is going to look the same as we’ve always done and will continue to do in the future.
Interesting end to Selfridge’s story from a financial planning perspective by the way. His wife unfortunately passed away from the flu pandemic of 1918. He died 23 years later at 89 years old without any money. Apparently, no one ever told him that gambling, womanizing, and the upkeep of his lavish house and personal ‘yacht’ would bankrupt him in the long run. I wonder over those 23 years if someone told him the way he was handling his money was the wrong way to do it? I wonder if he would have said ‘The client is always right’?