Practice Management, Ethics, and Client Communication
Running the practice and doing right
Practice management topics: segmentation of the client base (A/B/C), a clear value proposition, service calendars, and pricing models - AUM fees, flat/retainer, hourly, and commissions - each carrying different conflicts. Compliance: know whether the firm is a registered investment adviser (fiduciary) or a broker-dealer (Regulation Best Interest), the Form ADV and Form CRS disclosures, privacy rules, anti-money-laundering obligations, and advertising and testimonial standards. Ethics means disclosing conflicts in writing, documenting recommendations, protecting client confidentiality, and never promising returns.
Client communication is a skill: plain language, active listening, confirming understanding, and adapting to behavioral biases - loss aversion, anchoring, recency, overconfidence, and confirmation bias. A written investment policy statement plus a scheduled review is the best defense against panic selling.
Traps. Confusing fiduciary duty with suitability; thinking testimonials are prohibited (they are permitted with required disclosures under the marketing rule); assuming verbal instructions suffice; forgetting that documentation is the compliance record.
Rule of thumb. If it is not written down - the recommendation, the client's decision, the disclosure - it did not happen. Disclose, document, and review on a schedule.