So after all this, who do you trust?
Between Ponzi schemers and conflicted bankers, where do you put your money? After all, you can’t just stuff it in a mattress. It’s not very comfortable, and if everyone did that, there’d be a lot more stolen beds.
There are basically three criteria: you want someone competent, you want someone who understands you, and you absolutely want someone honest. They’re all hard to nail down. It really comes down to trust. Can you trust their skill, loyalty, and morals? To find out, you need to do some homework.
First, do they use outside experts: accountants, lawyers, and systems? Other professionals bring a critical eye. Second, could your advisor restate your financial goals back to you in words you understand? If not, they probably don’t understand you. Finally, could your advisor point to times when he or she has walked away from business for ethical reasons? If so, when? If not, why not?
There’s a theme here: advisors need to know their clients, and clients needs to know their advisors. Smaller institutions that still have a stable business mix offer a client focus that others can only wish for. Like Tom Thumb said, bigger isn’t better. The dodo and dinosaur are dead. Long live the ant!
Douglas R. Tengdin, CFA
Chief Investment Officer
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