Who cares — about you?

AmEx (American Express) and Detroit carmakers are knocking at Washington’s door for handouts. Too bad it’s not Halloween, so I could make an analogy to “trick or treat” and spooky things happening in the neighborhood. The only ones not benefiting from this mess are the honest soles that paid their mortgages, invested in America, and ran their companies soundly. And, those who enjoyed the good life at our expense are still having expensive parties — AIG. Forget about Republican or Democrat. Politicians along with Wall Street have created a mess, and the bailout may only make it worse.
As the bailout “continues to evolve,” we wonder what Henry Paulson had in mind when he requested a blank check. Monies advanced to banks are being use to buy other banks. The $85 billion given to AIG is now more than $150 billion as the company leaders continue to party. Overnight brokerage houses converted to banks to get in on the giveaways. I started a Federal Savings Bank, or FSB, with other advisors several years ago. It took 2.5 years to get our charter approved by the Office of Thrift Supervision.
TIAA/CREF’s Wall Street Journal ad reads: “It’s Not Who You Can Blame. It’s Who You Can Trust.” And, who might that be? In our years of service as an investment manager, we have learned that a well-diversified portfolio is the best insurance against the volatility of the markets. But, it will never perform as well as the best performing asset at any given time. Unfortunately, some investors can be overly swayed by the current hot hand. Earlier this year, a client insisted that he wanted to over-weight his portfolio to international exposure. As internationals had been the top performer for several years, and we saw the recession/market sell-off as global, we strongly recommended against his doing so. In March, he moved half his portfolio to a national manager that sold off all his holdings to put him in its managed account (an in-house mutual fund). As of mid-October, he had lost 35 percent and was wondering how he could get what was left back to us.
According to a recent study of its ultra-high network clients by Bank of New York/Mellon’s Private Client division: 60 percent reported that they had three or more financial/investment advisors and there was no coordination between advisors. Seventy percent reported that they had not completed all aspects of a typical estate plan. And 90 percent had not engaged in any heritage planning. The only heritage issued addressed by the 10 percent was business succession planning. Market crashes aside, it seems that the average high net-worth individual is poorly served by the five to seven wealth advisors they engage.
We can’t do anything to fix the markets. However, we can make sure we are getting comprehensive advice from people we can trust. Managing and passing on a family legacy is about good stewardship not short-term market performance. Who cares about you? Besides you, make sure your advisors do.


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