By Chris Hanson

It was a bit of poetry that caused quite a stir amongst the Boston Brahmin. At a Holy Cross Alumni dinner in 1910, Dr. John Collins Bossidy offered this toast:
And this is good old Boston,
The home of the bean and the cod,
Where the Lowells talk only to the Cabots,
And the Cabots talk only to God.

The Wicked Smart Investor hopes the wealthy Lowells and Cabots spoke to their investment adviser as well. Then again, maybe the aristocratic family did not know what to expect from an investment adviser. After all, there were no YouTube videos and “For Dummies” books around to educate us.
For your benefit, and maybe for some of the old-moneyed Bostonians, I will lay out what your expectation of an investment advisor should be:

  1. It’s all about you. Don’t accept any advice from an adviser who does not put you first. There are advisers that push products that offer them a high commission but eat up your return. To avoid this situation all together, hire a fiduciary. A fiduciary has a legal obligation to put your financial well-being ahead of his interest.
  2. Advisers help you create realistic financial goals. A good adviser will give you the correct answer, not the answer you want to hear. It may be a tough pill to swallow, but advisers create financial plans, not fairy tales. One day, you’ll be thankful the plan was not based on far-fetched expected returns. Despite some initial unease you’ll eventually sleep better at night.
  3. Unemotional advice. Our hard-earned money is a loved one; we don’t want to lose it! Yet, if you invest too conservatively it’s likely you will not have enough to retire. A good adviser will assess your risk tolerance and steer you toward only compensated risks. Your nest egg will grow faster.
  4. Education. You probably will never be an expert in financial matters, but a good adviser should provide you with a basic understanding of how your money is invested. There should be no black box. It’s quite fulfilling when a client says to me “You said…” That means they have learned something and have the basis to appreciate my value. This education is ongoing.
  5. Regular communication. Feeling that your adviser is always thinking of you is comforting. Communicating with email and phone calls at least quarterly, and an annual meeting are very typical. However, if you feel comfortable meeting more often, just let the adviser know. A good adviser is flexible.
  6. Reasonable fee. If an adviser did not charge you anything, how good would their advice be? If you want great service, you must expect to pay for it. After all, you are enjoying the benefit of your adviser’s education, experience and research. Maybe you can get financial advice from your beloved Uncle Harry for free, but that could be penny wise and pound foolish.
  7. Professional referrals. Many advisers specialize in certain areas, which means in order to service your account properly, they must refer you to other professionals. You may be referred to an estate planning attorney, a tax accountant, or a reputable insurance broker. These referrals are intended to protect your assets from various perils.

So, there you have it, a guide to a beneficial relationship with an adviser. Also, I’d be remiss if I did not mention Dr. Bossidy’s relationship with the City of Boston. This distinguished ophthalmologist housed his practice in the swankiest of Boylston Street’s medical buildings yet spent a lot of time treating the needy at Boston City Hospital.
Let’s raise a glass for, and offer a toast to, the good doctor.