Trovena Weblog

Where to Get Advice

Anne and Jane,
Your article today was excellent. I have two comments:
1. You state that brokers focus on investments and RIA's on bigger picture things. Some RIA's focus on investments only and some brokers do big picture stuff. The difference is that the broker's advice is designed to drive the sale of high margin products and strategies. (Annuities, hedge funds, etc...) and the RIA's advice isn't because he or she can't drive compensation with products. (Not without explicit disclosure.)
2. I wish you had mentioned the National Association of Personal Financial Advisors as a source of qualified advisors who don't accept commissions and who act as fiduciaries.  www.napfa.org provides a search engine to help consumers locate a local advisor.

Thank you for paying attention to this issue.

Christopher P. Van Slyke, CFP®


Wary Investors Are Seeking Out Objective Voices

Independent Advisers Are In Demand, but Picking One Means Homework

By ANNE TERGESEN and JANE J. KIM

In the aftermath of the financial-market crisis, investors are leaving Wall Street to sign on with independent investment advisers.

Last year, registered investment advisers brought in more than $108 billion of net new assets into the three largest custodians, according to Charles Schwab Corp., which holds roughly $500 billion in assets for such advisers. By contrast, the four major Wall Street brokerage firms saw an outflow of $8 billion in 2008.

Read the full Wall Street Journal article "Wary Investors Are Seeking Out Objective Voices" »

The Folly of Randomness

I'll write more on this later but this is a great piece from the WSJ on how sometimes we look at random events and see superior skill. Wall St. regularly takes these random events and markets them as skill. I think, however, if people read this article first, they might think twice about paying extra for this "secret sauce".

Christopher

The Triumph of the Random 

From banking to baseball, winning streaks owe much to the laws of chance

By LEONARD MLODINOW

It was the summer of 1945, and World War II had ended. Former soldiers, including famous baseball  stars, streamed back into America and into American life. Yankee slugger Joe DiMaggio was trying to be Yankee fan Joe DiMaggio, sneaking into a mezzanine seat with his 4-year-old son, Joe Jr., before rejoining his team. A fan noticed him, then another. Soon throughout the stadium people were chanting “Joe, Joe, Joe DiMaggio!” DiMaggio, moved, gazed down to see if his son had noticed the tribute. He had. “See, Daddy,” said the little DiMaggio, “everybody knows me!” 

Read the full Wall Street Journal article "The Triumph of the Random" »