Wealth Management Unwrapped, Revised and Expanded

CHAPTER 6Resist the Razzle Dazzle: How to Judge the Beauty Contest

• First, level the playing field
• Do you want an apple or an orange?
• When it comes to fees, the fruit basket becomes a huge challenge!
• Confused yet?
• See what’s included in that all‐inclusive package
• Are you my mother?
• A perfect match?
• Candor is a two‐way street
• What about references?
• Did you ever have to finally decide . . . pick up on one advisor and leave the other behind?

Overheard:

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.

First, level the playing field

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 ...