Ray, I would not show you five years of my personal investment statements. How I invest my money has no bearing on how I would recommend you invest yours. Your money should be invested in accordance with your personal financial situation, goals, risk tolerance and time horizon, not mine. When appropriate, I might also recommend specialized strategies to minimize taxes on distributions from your retirement savings and increase the magnitude and longevity of your estate, ideally over multiple generations. I would not hesitate to show you some (not all) of my current investment account statements to show you that I invest in the same investments and strategies I recommend and implement for my clients. I do eat my own cooking. That said, I don't necessarily invest in the exact same allocations as my clients due to differences in our ages, goal, risk tolerance, etc. Candidly, in 20 years, no one has ever asked to see my personal investment statements. Most of my clients come through referrals from clients, CPAs and estate planning attorneys. Most trust those referral sources enough that by the time they meet with me, they already want to work with me.
Asking an advisor how his/her assets are invested is a great question, and is perfectly appropriate. Looking for actual statements is in my opinion, not appropriate. If you can't take his/her word for it, you shouldn't be working with him/her.
Ray, while I would not go through my personal financial statements with any of my clients, I do make sure to provide historical results of the managed portfolio(s) we will be utilizing in their account if they are interested in seeing that.
One option may be to find an advisor who has tracked the actual performance (net of fees) of their portfolios. Make sure the the performance information is the result of an actual investment in the portfolio and not back-testing if you do attempt to find an advisor who can provide this information to you. Also keep in mind that past performance is what it is (from the past) and is not an indication of things to come, necessarily.
Hi Ray! Interesting question. Registered Investment Advisers maintain a record of securities holdings for access persons for five years. This is a regulatory requirement for auditors to use to help determine if trading improprieties have occurred, not an "open books" rule for clients and prospects. As Rich mentioned, how an advisors money is invested is not indicative of how your money should be invested. My funds are actually managed by another advisor, so I am completely hands-off, and do not necessarily mirror my recommendations for clients since our needs and financial situations are different. Looking at my statements would be irrelevant to any hiring decision.
A better question would be to ask the advisor about his/her investment philosophy. For example, I believe that the average investor can manage their own money and I generally recommend low-cost mutual funds and a buy-and-hold strategy for the long term. A different advisor may have the philosophy that their firm can create superior returns through a selective value stock trading model, which would mean your funds would be invested and traded very differently. Find someone with a philosophy that matches your risk tolerance and someone that you can connect with on a personal level, and start by investing a small amount if you have concerns. The trust you build will outweigh numbers on a piece of paper. Good luck to you!
I would not show my personal statements. I would be willing to show exactly how my money is invested. That is not a secret. However, at my firm we believe that a portfolio should consist of all invested monies. My wife's 401(k) is part of our overall portfolio, as well as our Roth IRAs, my Simple IRA, and our taxable account. I don't believe that it is appropriate for a prospective client or client to see the value of my wife's 401(k) (or the value of any of our accounts).
Ray, I assume you are wanting to know if I eat my own cooking. I do and I'm happy to show you the statements. Rich, however makes a host of good points and I agree with all of those points. In addition your portfolio will be unique due to its size. Some investment vehicles are not available in smaller accounts or not efficient because of transaction fees, etc. When the account was opened will also cause differences in the design. Mutual funds close to new or additional investment from time to time and we may need to select an alternative fund.
When selecting an advisor, most people are trying to answer two questions. Is the advisor competent and can I trust them. Eating your own cooking goes to the trust question. I think a line of questioning that may reveal more information for you about trust is to explore the advisor's compensation structure. The most competent and trustworthy advisor who practices in an environment where they are compensated based on priorities other than the client's, is not a good choice.
But I also agree with the comments of the other advisors, that your needs (and hence your portfolio) might be quite different than mine.
I do not have an issue showing my investment statements and reviewing the strategy and adjustments over the last few years. I will share this information to the right person under the right circumstances. I need to understand your investment goals, risk tolerance and investable assets. If you would like to discuss your specific situation you may contact me at 415-345-8185 or email firstname.lastname@example.org.
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