I read the article “RIAs are losing competitive edge” (InvestmentNews, July 29).
I am happy to see the “big” firms seeing the light — that investors are tired of getting ripped off on commissions for trades and hidden internal fees. I used to work at a Wall Street firm, and even though I had clients on a fee basis (back then, 2%, now 0.75% to 1%), there were a lot of turnover fees that the client never saw but the firms raked in.
I used the firm's so-called approved money managers to manage my clients' assets, and I wasn't impressed by their performance.
Now as a registered investment adviser, I charge only a fee and use a fund of funds of no-load index funds. We structure the portfolio to the clients' risk levels, using a standard deviation to measure their risk, and re-balance on a quarterly basis to keep the risk levels in check.
It is very passive and with very low turnover ratios.
Plus, I coach my clients. I keep them educated and disciplined and don't let the media make them go into risky sectors or things such as commodities just because they are “hot.”
I am not an order facilitator or robot like most financial advisers, who are afraid to say no to a client when he or she is about to do something harmful. If you set up a well-diversified portfolio using modern portfolio theory, the three-factor model and re-balance, you will do just fine over time and with a lot less stress.
Finally, and probably more importantly, I work as a fiduciary with my clients and don't use the flimsy suitability requirements that Wall Street works under. Investors need to know the difference.
I work for my client first, whereas advisers on Wall Street or at big banks work for the firm first, and the client second. So Wall Street can try to change colors, but I still don't trust such firms.
Investors need to know all the hidden fees involved in “actively” traded mutual funds and other packaged products that Wall Street is so adept at pushing. So I don't feel I am losing my “edge” at all.
Teach Wealth Management Inc.
Palm City, Fla.
Industry must support female financial advisers
I have close to 30 years of experience in the financial services industry, with 24 years in distribution management. I have recruited, trained, coached and mentored more than 30 women, and I can offer only my opinion as to the issue so aptly posed in the editorial “Make industry more appealing to women” (InvestmentNews, Aug. 12).
The recruiting, training and continuing support resources used by the industry today vary little if any from the traditional male-oriented sales focus that has been the hallmark of our industry for more than a century.
We must as an industry engage in identifying and constructing a new business model tailored to attract, train and support female financial advisers marketing to female clients.
All the demographic analysis, market surveys and industry white papers clearly indicate a tsunami-sized wave of opportunity for our industry if we can just develop and deploy a new paradigm cognizant of the many unique and necessary differences in the adviser relationship where women are serving women.
In the words of C.S. Lewis: “It may be hard for an egg to turn into a bird; it would be a jolly sight harder for it to learn to fly while remaining an egg. We are like eggs at present. And you cannot go on indefinitely being just an ordinary, decent egg. We must be hatched or go bad.”
Futurity First Insurance Group
Rocky Hill, Conn.