The investment industrial complex does not want you to know how to evaluate its members. If it did you would have easy access to the following data:
- Each investment advisor would establish a target rate of return that could be measured against in future years.
- Each investment advisor’s portfolio would be compared to several reasonable benchmarks to test if the risk/return relationship that the investor experienced was in the right zip code.
- Each investment advisor would provide their clients a clear, written fee agreement.
- Each investment advisor would disclose in writing all potential conflicts of interest.
- Each investment advisor would provide a performance report that is understandable and supports the client in knowing how the advisor was doing compared to agreed upon key performance indicators.
But you don’t have easy access to this data. The investment industrial complex does not require its members to provide this level of disclosure to its clients. So it’s on you to figure out how to monitor your investment advisor because the industry has no incentive to teach you how.
Following is a link to a short video on how to test if your emperor is wearing clothes:
At Anodos, we help fiduciaries answer the question, “Is my investment advisor doing a good job?” Many of our clients are individual trustees, business managers, ERISA trustees and endowment board members who are obligated to independently monitor the activities of the agents to whom investment duties have been delegated. What makes us unique is this is all we do. We don’t manage money, sell insurance, or accept referral fees. We don’t have a horse in the race.
Onward,
Josh Yager, Esq., CFP®, ChFC®
805-899-1245
jyager@anodosadvisors.com
Anodos helps trustees (ERISA, individual, and endowment) save time, reduce their personal risk, and fulfill their fiduciary duties. We do this by helping the trustee conduct audits of the money managers to whom investment duties have been delegated. Fiduciaries have an affirmative duty to provide ongoing and independent oversight of the money managers. What makes us unique is that we do not manage money or sell insurance. Doing fiduciary audits, benchmarking studies, and performance attribution is all we do.
We help trustees save time, reduce risk, and fulfill their fiduciary duties. What makes us unique is that trustee governance support is all we do.