Is it Time to Switch Your Investment Advisor?

The market has rebounded from the drop in October 2008, and if you were lucky, you rode the storm out and recovered a significant amount of principal. Or, perhaps you jumped ship, changed your allocations from equity to fixed income and missed out on the upswing. Whether you recovered your principal or took it on the chin, there is a very important question to ask within your organization. In the past few months, how often has your advisor been available to your organization by telephone? A good investment advisor calls once per month, at a minimum once per quarter. If your advisor isn’t calling in consider the reasons? And just maybe--it’s time to move on.

Here are some questions you may want to ask if you are interested in making a switch.

·         Is the Company’s results consistent

·         What is the Company’s performance relative to benchmarks?

·         What is the Advisor’s performance relative to its peers?

·         Is the turnover high at the Company?

·         Is there a succession plan for senior management?

·         Does the Company have adequate backup and recovery processes?

·         Is there any ownership incentive for consultants?

·         Are the Company’s reporting capabilities able to meet your Organizations needs?

Not ready to make the change? Satisfied with your current advisor? At a minimum consider dusting that old investment policy off, if your organization has one and make sure your spending needs are in alignment with your investment strategy. Every organization with investment activity or excess cash should develop and adopt a written investment policy, which should address the following:

·         The investment objectives (that is, increase earnings, provide specific returns, or maintain accessible cash reserves).

·         The person authorized and responsible for investments.

·         The maximum amounts for investments and the approval criteria.

·         The types of authorized investments.

·         The desired mix of products (especially those considered to create risk).

·         A goal for the amount of return expected.

·         Approved vendors of investment products.

·         The maximum length of time cash can be committed.

·         The criteria for investments versus debt repayment.

·         The handling of emergency cash needs.