A well‐known investment strategist shared an embarrassing episode. During a sales call he was asked a question by a prospective client. After he proudly delivered his “expert” answer, the investor replied with exasperation, “I asked you what time it was, and you told me how to make a watch!”1
Investors don’t want to know every detail of the portfolio management process, and often complain about how dry—or worse, truly boring—many investment professionals are. On the other hand, nobody wants a song‐and‐dance routine like Richard Gere’s in Chicago, when he dances across the courtroom dressed as a nightclub entertainer.
The common complaint of investors—that advisors give too much detail and go on and on with arcane terminology—is a valid one. Frustrated and bored, the investor tunes out. But there are ways to remedy this situation.
The process of interviewing several advisors is often called a “beauty contest.” And like all beauty contests, you need to know what’s going on behind the ...