can you trust an expert?

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August is hot in Gainesville, Florida. In August 2012 I was driving my 1998 Ford Escort and the air conditioner went out. It didn’t blow up or start making funny noises, it just sort of faded over about a week. I held out hope that maybe it was just me. Maybe my short trips just weren’t long enough for it to cool down. Maybe I was just imagining that it wasn’t as cold as it used to be. After all, August is hot.

Then my wife used the car to run to the store and when she got back she said, “Your AC isn’t working.” She was right. I had to face the truth, my AC wasn’t working. So I took it to a auto repair shop.

“Sorry buddy, your compressor has a huge leak. We’re going to have to replace it.”

“Can we just recharge it?”

“No, the leak is too big.”

“How much will a new compressor cost me?”

“About $750, maybe a little less if we can find a used compressor.”

“I can’t do that, the car is only worth maybe a thousand. Thanks for checking it out.”

So I toughed it out. August. Gainesville, FL. Broken AC. My commute to work was only 4 minutes and I figured it just wasn’t worth the $750 for four minutes of comfort.

The summer faded and having a broken AC didn’t matter as much. Until June 2013. June is hot, too. And I got a new job with a 15 minute commute. Still not bad, but it was a little more uncomfortable. One day in June I visited an auto parts store to get a brake light for my wife’s car and while waiting in line I noticed  a do-it-yourself AC coolant recharge product that says it can fix small leaks in your compressor for about $30. I bought it. If it didn’t work, well… it was only $30.

It worked.

Why didn’t I try this sooner? Why did I go almost a full year without working AC? In Florida??

Because I trusted an expert, one who didn’t put my best interest first.

Maybe the compressor did have a big leak and in the expert’s judgement it needed to be replaced. But what about trying to recharge the system with coolant for 1/25th the price? There is no doubt that the repair shop wanted to do a $750 repair instead of a $30 service. I take responsibility for trusting the expert. I should have realized the conflict of interest that they had in making the suggestion to replace the compressor. I should have tried the $30 fix sooner. I don’t think they are evil or greedy. I think they are a business. The purpose of a business is to make money.

Unless the purpose of a business is to put their customer’s best interests before their own. In the financial world that relationship is called a fiduciary. A fiduciary is a person that looks after the assets on behalf of another and is morally and legally bound to act in the other person’s best interests.

If you are considering hiring a professional to help you with your personal finances, one of the first questions to ask is, “Will you act in good faith and in my best interests as a fiduciary?”As a Registered Investment Advisor my duty is to act in a fiduciary capacity for my clients.

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