What’s most significant to you when it comes to selecting a financial services provider?
According to the results from many recent surveys, trust was named as the most significant issue for evaluating financial services providers; outranking client service, performance, and variety of product.

But how do you judge trustworthiness? Some financial service firms might present their experience and assets under management to convey their commitment to building trust with potential clients.

But long histories and billion-dollar portfolios don’t essentially translate into a trustworthy relationship.
The recent scandals within the mutual fund business exposed some illicit and unethical practices that were happening behind the scenes at a number of the largest and oldest financial services firms in the country.
While a number of these companies righted their wrongs, the lingering effects of the scandals still lead several investors to raise the question of, “Who can I trust with my money?

When evaluating financial service establishmentslike brokerage firms, insurance companies, mutual funds and independent firms, there are several considerations that can help determine who is worthy of your trust.
According to Liz Pulliam Weston, feature author for MSN cash, one of the most important words to look for with your advisor is fiduciary.
She says that the word fiduciary is a big word, however not knowing what it means can cost you a lot of money. What it means in the financial world is someone who’s committed to always putting your financial interests ahead of his or her own”.
Ms. Weston further explains, that a true fiduciary is much harder to find than one may think.
Most of the people who wish to offer you advice concerning your cash aren’t held to that high standard.
At best, they’re held to a suitability standardwhich suggests they’re supposed to suggest investment and insurance product that they deem acceptable for your scenario. Just ‘acceptable’…not…‘the best choice’ or ‘in your best interests’ .
There is a vast distinction between the two methods of dealing ,with clients. For example, let’s say the adviser might earn  a more lucrative  commission for recommending an in-house product being promoted by his financial services firm…this could result in you netting  6%  a year, instead of 8%.
The  could represent a decrease in portfolio performance of over 35%!!! Finally, Ms.Weston states, “in the financial-services world, there are three job titles that automatically tell you that you’re getting a fiduciary standard: Attorney, CPA & Registered Investment Advisor”.

Should You Consider a Managed Account?

As your investment portfolio grows in value, it becomes essential to make the proper moves with your assets.

For many individuals with investable assets of $500,000 or more, a managed account provides an effective solution to the challenges faced when running a large portfolio. But, who do you hire?
According to Jack Waymire, founder of the Paladin Registry (a free public services firm for investors) author of ‘Who’s Watching Your Money?  once it involves hiring a financial adviser, millions of investors use terribly subjective processes: likeable personalities; sales pitches or choosing advisors from big name financial services companies… as a result they they feel safer”.

But, he also explains that sometimes advisors from big brand name companies might not be the safe decisions investors assume they’re for 5 reasons”:
The corporations are public companies, so their first responsibility is to shareholders and not to investors.
In their companies’ quest for profits  the advisors may have more conflicts of interest than other financial professionals.
The companies have a protracted history of abusing investors to maximise profits.
The companies have paid billions of bucks in fines for cheating investors.

Thousands of their executives and advisors have gone to jail, were fined or were forced to leave the industry.

The companies have spent billions of dollars on lobbyists in order to get new legislation that favors them and not investors
Another telling statistic is the thousands of advisors who left brand name companies so they could do what was best for his or her clients…most of those breakaway advisors started their own Registered Investment advisory companies.”
By hiring a Registered Investment Advisor to manage your assets, you’ll gain access to investment methods and the next level of personalised service that’s not generally offered in large financial services firms.
One of the first  advantages of a managed account is that securities are often purchased in the most tax-efficient manner.
Another example is, specific securities that have sustained losses in your portfolio are often sold so as to offset any potential capital gain liabilities.
With mutual funds, redemptions by other fund shareholders can result in a tax liability because the fund manager had to sell some of the fund’s holdings in order to meet these redemption requests.

If you have been looking for a more personalized investment approach for your portfolio, a managed account may make sense for you.

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