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No Time for Non-Transparency




 By Bob Payne, Managing Director and Chief Investment Officer (CIO)

I recently spoke with a prospective client who sought some guidance. She had just met with a financial advisor who didn’t want to give her any actual advice until she moved her money over to his company. Of course, she was hesitant to move any money without a better understanding of what he intended to do with it. So she asked me if she was overthinking the situation and whether that investor’s approach was typical.

Three Keys:

Avoid advisors who won’t provide details about how they intend to invest your money

The best investors know what they own and why they own it

Payne Capital Management tailors a unique strategy to each individual investor

I told her a good friend of mine is the chairman of the investment committee for one of the largest charities in the country. Several years ago, he and his team met with an advisor who also wouldn’t divulge his investment strategy. The advisor just wanted them to transfer all their money and his reasoning was if he revealed any details, other people were bound to find out and he wouldn’t be able to outperform the market like he had annually for the previous 20 years. That advisor’s name was Bernie Madoff, and he’s now serving life in prison for stealing $60 billion in a Ponzi scheme.

So I told the prospective client it sounded like the advisor she spoke with is either not very honest, hard-working or caring. Whichever the case, I don’t want her to ever work with someone like that. Because you need to have an individual strategy based on you succeeding as an investor. The best investors know what they own and why they own it. So you have to find someone who will educate you.

This isn’t solely a problem on the part of financial advisors either. Because Payne Capital Management has done well in the markets over the past eight years, my clients are referring me to a lot of different people. Some of the prospective clients will say, “Hey Bob, I want to transfer my money over to you. Just take care of it, I’m not worried about the details. You’ve done a great job with my brother-in-law or my aunt or my sister, so just do that for me too.”

But my response is we can’t just do that because we don’t have a cookie-cutter approach. We need to sit down and make sure we understand everything about you. Making money for its own sake isn’t the goal. You have to invest money based on real-life goals, like retiring with an amount of wealth you can’t outlive, or gifting money to charity, or making sure your estate isn’t an IOU to the IRS. So we need to go through a process, and some people don’t want to. They feel like they’re missing out on the Trump rally, and just want to give their money to any charlatan who will throw it into some investment. But the truth is if you don’t understand what you own, you’ll never stay in it for the long-term, and that’s the key.



Interested in learning more about what impact this could have on your future financials? Contact one of our expert advisors today:

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