Trusted Advisor Checklist

Here is a checklist we would encourage you to employ when searching for trusted advisors. Please note that very few will have all these characteristics, but whomever you are considering should possess the majority of these attributes and avoid the majority of the shortcomings.

Does the advisor or firm:

Have both depth of knowledge and substantive experience with advising affluent families? Start with thoughtful planning and/or aid construction of an overarching plan, or at least an Investment Policy Statement, tailoring solutions to your specific needs? Put process ahead of product, and can they offer advice irrespective of where assets are custodied or what they’re invested in? Have access to the broadest range of asset classes – public and private (e.g., real estate, private equity, private debt, and so on)?Have the capacity to identify, research, and access best-in-class investment opportunities? Have a robust understanding of the investment universe and a firm grasp of financial history?Challenge your thinking, rather than simply following your lead?Educate you on what’s possible, empowering you to become the most sophisticated and thoughtful steward of capital you can be?Introduce opportunities that are consistent with your needs (i.e., institutional-quality vs. retail-focused opportunities)?Recognize the various biases investors are subject to and work to ensure you are not entrapped by them?Have a compensation model that is aligned with your interests, priorities, and needs? Or does their compensation incentivize pushing a specific behavior on you (e.g., investing more, trading more, taking more/less risk)?Fully disclose their compensation before the start of the working relationship, and ensure that it is visible to you (in real dollars) at all times? Truly concern themselves with your full financial picture holistically — integrating other elements, such as estate and tax planning, financial administration and cash-flow management, family dynamics, philanthropy, succession, and other family office concerns?Monitor risk of the portfolio and continually re-underwrite previous decisions to ensure their continued appropriateness?Liaise with other experts (accountants, lawyers, etc.) to ensure that all investment decisions are comprehensive and strategic?Attempt to add value at every turn, and do they have a method of measuring the value they bring or create? Benchmark outcomes in a consistent, thoughtful, intellectually honest, and disciplined fashion?Recognize the roles of luck and skill in investing, and do they sufficiently consider frequent reversions to the mean?Regularly revisit the originally prescribed asset allocation and adhere to strict risk management and rebalancing practices?Inspire confidence and allow you to sleep well at night while enabling you to dial up/down your optimal level of engagement? Acknowledge mistakes quickly and honestly, and are they committed to their continuous improvement?

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