When choosing an investment manager, Gene Sulzberger believes there’s no substitute for visiting a financial professional in the firm’s office. “You can learn a lot about a company from seeing behind the scenes and meeting the people who work there,” said Sulzberger, senior vice president and chief research officer for PRS Investment Advisory in Miami.
“It’s a good idea to interview different investment management firms, such as trust companies, brokerage firms and registered investment advisors and get to know how they operate and their investment styles,” he added. “Get the biographies of those people who will be working on your account and understand their backgrounds. When you go to the office, try to get a sense of whether people enjoy working there, and ask to see the back offices along with the client meeting room.”
To make it easier to compare prospective wealth managers, Sulzberger recommends asking a series of questions about the firm’s investment philosophy and processes, such as:
• How does the firm make investment decisions?
• What are the differences between a discretionary or non-discretionary account?
• Does the investment firm adhere to a fiduciary standard of care (the highest standard) to the client?
• What are a client’s investment options? For example, do investments include proprietary funds, index or actively managed funds, individual securities and/or mutual funds and alternative asset classes?
• What are the minimums for different types of investments?
• What are the fees associated with an account? That might include management and administrative fees, advisory or trust fees, custody fees, front or back end loads, 12b1 fees, account closing fees, wire fees, etc.
• How is the wealth manager paid: fee only, commissions or a mixture of the two?
• Who holds custody of the assets? Is there a separate custodian or does the firm hold its own assets?
• What checks and balances are in place to ensure the safety of client assets? Once an investment management relationship is in place, it’s important for attorneys, accountants and other professionals to stay in close touch with their advisors.
Sulzberger also points to the importance of staying focused on long-term objectives, rather than responding to the daily ups and downs of the markets.
“Even successful professionals can fall victim to their emotions, resulting in panic selling or simply a lack of patience,” he said. “Often times panic selling occurs when the markets have had a large shift downward. The news stories reach a crescendo and panic sets in. But patience can be a true virtue in the investment world.”
Sulzberger says it’s also a mistake trying to wait for an upward movement before making an investment. “In my opinion, it’s impossible to time the markets,” Sulzberger said. “Studies indicate that more than 90 percent of a portfolio’s return is attributable to asset allocation decisions, not by market timing or security selection.”
Gene C. Sulzberger is senior vice president and chief research officer, PRS Investment Advisory, in Miami. He is member of The Florida Bar, a Certified Financial Planner and a Registered Trust and Estate Practitioner who works with U.S. and international high net worth clients. Sulzberger, who has more than 20 years of trust and investment experience, joined the registered investment advisory firm in 2008. PRS is wholly owned by EFG International of Switzerland, with offices and affiliates in 30 countries.
| Handling Structured Settlements Gene Sulzberger says some South Florida attorneys make the mistake of putting everything in a structured settlement when negotiating for their clients. “Having at least part of a settlement in a lump sum can assist clients with larger purchases like a home or a car,” he said. “Clients who enter into structured settlements face the problem of not being able to borrow against the future payments. They then become more likely to want to sell their structured settlement, which is rarely the best scenario.” |
South Florida Legal Guide 2012 Financial Edition