ARBOR WEALTH: Questions to ask when choosing an advisor

Published: Tuesday, November 26, 2013 at 03:36 PM.

“If Bernie Madoff had bought businesses and investments, he would be able to make restitution of those initial investments. He might even be able to pay a fraction of the gains he claimed to have.”

Madoff owned a $7 million New York penthouse and enjoyed a $3 million Hamptons home on the weekends. This was in addition to a $9.3 million mansion in south Florida. On the French Riviera, Madoff owned a $1 million chalet and operated two boats. He frequently spent $100,000 a month on chartered jets and limousines. In his apartment sat a Steinway concert grand piano. He bought his brother a vintage Aston-Martin, which was used as a company car. 

The spending was unbelievable. All on the backs of trusting investors. Obviously, Madoff’s personal wealth management habits were at odds with those of the vast majority of his clients. His own personal investment accounts were not that sizable given the level of his spending.

Madoff’s lifestyle also begs an important question: while he was jetting about, who was managing his clients’ money? Actually managing, monitoring and rebalancing private wealth portfolios requires that an advisor spend countless hours daily, glued to a computer and multiple screens, reading and studying the movement of securities and analyzing industry trends. 

If you see your advisor glad-handing at public functions every day or vacationing for months at a time, someone else is probably managing your money. Who that “someone” is and if they actually have your goals and risk tolerance and best interests in mind is another good question you may want to ask.

Margaret R. McDowell, ChFC, AIF, a syndicated economic columnist, chartered financial consultant and accredited investment fiduciary, is the founder of Arbor Wealth Management, LLC, (850-608-6121 — www.arborwealth.net), a fee-only” registered investment advisory firm located near Sandestin. Arbor Wealth specializes in portfolio management for clients with $250,000 or more of investable assets.

 



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