A firm’s glossy website can leave a strong first impression and when you go in to meet with a firm and its team you will likely experience a similar charm. However, sometimes these efforts to entice new clients make it hard to see beyond the veneer. So how can you tell if a firm is telling the whole story?
Generally, if a firm has a high turnover of staff, both administratively and at a more senior level, you should be cautious. You also want to be aware of any regulatory infractions, meaning the firm or Portfolio Manager has run afoul of industry regulations or the law. Does the team you’re dealing with have the integrity to be honest in their dealings with you and what they are offering or are they only telling you what you want to hear in order to win over your business? And just as important, does the firm operate in a manner that reflects your values and principles?
These are pointed questions that, although may be uncomfortable to ask, are integral to your due diligence process. Unfortunately, much like interviewing someone for a job, it can be difficult to assess whether what you see is what you’ll get. Being direct and asking hard questions, while taking note of the reactions, can help you to better formulate your opinions. You are also more than welcome to ask for references, but bear in mind that these can also be easily misrepresented.
At Capstone, we are proud of our very low turnover of staff and strong record of integrity. We usually offer clients a walk-through of our offices and an opportunity to talk to the staff. It’s a long-term relationship, so you need to do your homework, because a firm might not always be forthcoming.
Janet Kim Sing, Portfolio Manager
Capstone Private Wealth