A new report for affluent investors takes the wealth management community to task for unjustified high fees and inadequate services. It urges high net worth investors to become more active in measuring and managing their advisors and estate plans.
According to the report, Managing Your Wealth Wisely: Six Proven Strategies, "Many high net worth individuals (HNWs) feel that their traditional providers do not offer top tier solutions when it comes to strategic asset allocation, hedge fund manager selection, due diligence services, integrated tax planning, etc. Others feel that their advisors aren't bringing them the highest quality investment products available because their own firms don't sell these funds and/or have proprietary house funds that they're trying to push."
-- Many high net worth individuals feel that their advisors do not clearly benchmark and communicate to clients their relative performance statistics - and few advisors beat their comparable indexes on a risk adjusted, after-fees basis over the long run;
-- Many advisors fail to fulfill their promise to customize individual portfolios.
-- Too many advisors push portfolios comprised solely of stocks and bonds and do not provide a sufficient range of "alternative investments" to increase diversification and reduce risks;
-- Many affluent investors now believe U.S. markets are more risky than international investments;
-- Advisors overall know they need to do a better job of educating investors on estate and legacy planning issues; many investors do not have sophisticated estate plans and even fewer understand the key tradeoffs and issues.
"It's not just about investing in stocks and hedge funds. Affluent investors must also deal with risk mitigation strategies (e.g., more diversification into non-correlated alternative investments), transferring wealth to heirs, tax minimization, and effective charitable giving," says Wayne Cooper, founder of Wealth Management Exchange, and publisher of the report.
Among the key topics covered by the report: assuming accountability for your portfolio; selecting and monitoring advisors; solidifying your asset allocation plan; taking a global approach to stock and bond investing; expanding estate and legacy planning; and preparing for the challenges and enjoyment of retirement. -- Exchange Networks
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