Now, you may ask, why does an investment firm prefer the exclusivity of working only with a professional advisor? The answer is: commitment.
Investment managers want to feel confident that the investor is committed through the full market cycle –they won’t bail out at the first sign of market volatility. Doing so would disrupt the investment managers’ disciplined, long-term process.
And, they realize that professional advisors understand the importance of commitment and will counsel clients accordingly.
This arrangement makes it a winning situation for everyone. The investment firm has confidence in the relationship with the advisor; the advisor gets the advantage of a successful firm; and the client gains access to a firm that would not have been available to him as an individual.
The firm I’ve added to our investment options meets all of my criteria. It has a strong academic and research focus, and it has a detailed methodology and robust analytical models. My vetting process took a fair amount of time, but I am very satisfied with the selection.