The world of investing can be a maze, with countless paths and choices that have the potential to either grow my clients’ wealth or lead them astray. As a financial analyst and writer, I consider it my mission to light the way for investors, demystifying the twists and turns of the market. Trust is the cornerstone of any advisor-client relationship, but when that trust is compromised, the repercussions can shake an investor to their core. This brings me to the situation with Eric Coombs and Huntington Investment Company.
The Importance of Trust in Financial Advisory Services
In my career that began in 2006, I’ve observed and analyzed the trajectory of many financial advisors across renowned firms. Eric Coombs was one such figure, weaving through the financial landscape with what seemed to be a commendable track record — until the allegations emerged in December 2023, that is. Huntington Investment Company asked him to resign over questionable activity, sending waves of concern across the industry and among the investors who had entrusted him with their resources.
For those perhaps unfamiliar with what I deal with day in and day out, recommendations that are “suitable” and the adherence to fiduciary responsibilities are not just checkboxes on a list but are essential to protecting investors, especially those who might not be well-versed in financial intricacies.
Decoding The Accusations Against Eric Coombs
When it comes to financial advice, the concept of “suitability” is akin to the foundation of a house. It ensures that any investment suggestion I make is constructed on a bedrock of the client’s financial objectives and risk comfort zone. There’s a series of considerations that come into play: financial situation, age, and even something as seemingly mundane as tax consequences. If an advisor sidesteps these considerations, it’s not just a misstep; it’s a dereliction of duty that can lead to serious financial repercussions for investors.
A prudent financial advisor’s mandate involves a thorough due diligence to affirm that a recommendation holds water—a failure of which can drown both the advisor’s and the client’s aspirations.
Lessons for Investors and The Industry
Allegations like those against Eric Coombs are alarming, yet they underscore a vital lesson for investors — vigilance is paramount. It’s crucial for anyone with skin in the game to understand the expectations of their financial advisors. Armed with this knowledge, investors can safeguard themselves against unsuitable advice and practices that don’t align with their goals.
Famous financier Warren Buffet once said, “It takes 20 years to build a reputation and five minutes to ruin it.” This rings especially true in the financial advising industry. Each piece of advice I give, every investment decision made, holds someone’s trust—and, potentially, their future.
According to a shocking financial fact, unsuitable advice from bad financial advisors costs investors billions annually. This highlights the importance of due diligence in vetting financial advisors, and investors can start by checking an advisor’s FINRA CRM number through a transparent resource.
To rebuild or fortify that essential trust, the industry must not only react to such incidents but preempt them through diligent oversight and education. Financial advice is not just about the what and the when; it’s about the who. Investing in a relationship with a trustworthy advisor is as important as the investment itself.
Eric Coombs’ episode with the Huntington Investment Company teaches that the guardians of our investments must meet the highest standards of ethical conduct and transparency. At the end of the day, it’s not just about safeguarding money; it’s about safeguarding the trust that each investor places in their financial advisor—to ensure a stable and honest financial future.
