Under The Covers – Vol. 3

Posted by on Dec 9, 2011 in Under The Covers | 0 comments

In the world of investing who is in your corner, sheep or wolves? Or wolves in sheep’s clothing?
The long standing tradition of having someone or multiple people orchestrating your financial game plan is essential. Even if you are doing it yourself, investors still need to go between people and institutions.

The industry has been very creative in what they call a stock broker. In the old days stock broker was most common, as the industry saw greater opportunities the title became more sophisticated. Stock broker became an account executive, to registered representative, to financial consultant, to financial advisor, to financial planner, to wealth manager, to private wealth advisor, in summary broker. We understand not all brokers are created equally. Every investor should have at least one broker to bounce ideas, philosophies and opportunities off them, or professionals who are sharing theirs with you.

Brokers are trained to administer transactions for a commission and/or fee. A quality broker will educate their customers on plausible risks and returns of not only the security at hand but also the entire portfolio(s). It is very difficult to discover a broker’s true intent, just remember to ask questions. Here are a few suggestions: what is your investment philosophy? How and frequency you communicate with customers? How do you determine investor success? What strategies do you employ? What disciplines do you utilize? What is your game plan? What do you charge and how? How many customers do you manage? How many full-time staff do you employ? What is your minimum to be a client? What is your average client’s investable assets with you? How do you educate your clients? What credentials separate you from other brokers? Are you willing to refer 3 to 5 existing customers for verification?

We know this sounds arduous, however you can’t afford to get it wrong. We are only talking about your financial well being!

As for Trend Portfolios, we believe you can utilize either an order taker broker or a more sophisticated one as long as you feel you are getting what you pay for.

Until the next time we look under the covers!

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