With the holiday season quickly approaching, we prepare by trimming trees, shopping for gifts, baking cookies, making lists—and checking them twice. A great deal of planning goes into a perfectly executed holiday celebration. Last-minute shoppers aside, many of us start making our holiday purchases months in advance so we can top last year's gifts.
But not all presents are well received; like an itchy wool-knit sweater, some things are better left in the box. In the world of financial advice, I'd say the same goes for hidden or non-transparent fees. When investors fully unwrap the multitude of non-transparent fees in our industry, it may elicit a "Bah, humbug" from even the least Scrooge-like among them.
(Read more: Millennial investors have trust issues)
Why is the topic of transparency in the financial services industry so important to me? And why should it be important to investors? I was taught at a very young age to always be honest and truthful. As advisors, telling the truth means we need to be extremely straightforward and transparent so investors will understand all of the fees they pay.
I recently observed a panel in which two groups of consumers fielded questions from advisors and provided candid feedback. As expected, panel members repeatedly stressed the importance of, and need for, more trust in and honesty from their advisors—and the financial services industry as a whole.
This wasn't a revelation to me, as many clients come to our firm in search of increased communication and transparency of information, which allows investors to make informed decisions.