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  • Why Investors Should Care About The Fiduciary Standard [View article]
    The fiduciary standard proposal would replace the suitability standard for advisors employed by brokerages, so it would not be redundant.
    Oct 5, 2011. 10:30 AM | Likes Like |Link to Comment
  • Mutual Fund Disclosures Don't Work [View article]
    The way disclosures are practiced today means that investors are confused into paying higher fees than they otherwise would ... a difference of 1 or 2% can add up to tens of thousands of dollars quickly, and even hundreds of thousands over the lifetime of a fairly substantial portfolio. I never met an investor who didn't care about that kind of money.
    Oct 3, 2011. 11:47 AM | Likes Like |Link to Comment
  • Good Money Managers And Advisors Eat Their Own Cooking [View article]
    We are glad this blog post raises so many good questions about advisor duties and compliance issues amidst a diet of homegrown cooking. From a regulatory perspective there are a couple things to keep in mind. First, under certain circumstances it IS okay for advisor employees to purchase the same securities as their clients - but only when the practice has been fully disclosed and the advisor maintains adequate policies and procedures to manage potential conflicts to ensure that the client trades are executed properly with priority. In the case of Wealthfront (and many other advisors as well) the practice is disclosed in Form ADV filings, which are available on our website alongside our policies. Investors should ALWAYS review an advisor's Form ADV (and their policies if they are made available) to understand an advisor's business practices!

    Second, the regulations prohibit advisors from publishing client testimonials about a client's experience or service with the advisor, and this prohibition extends to employees who are clients. As a result, Wealthfront employees may not comment about the details of their own experience with the product. However, as Wealthfront's CCO, I monitor the personal securities transactions of our employees and their immediate family members, and I will attest to the fact that many employees DO choose the Wealthfront product for both their personal investing needs as well as those of their immediate family members. About two-thirds of full-time employees of Wealthfront have funded accounts with the firm.

    Geoffrey Moore,
    CCO of Wealthfront
    Sep 10, 2011. 03:04 PM | Likes Like |Link to Comment
  • 10 Signs of a Bad Investment Advisor: Part II [View article]
    I did a little research: based on my understanding, consultants or anyone else in a customer-facing capacity at a full-service or discount broker should be properly licensed, and therefore subject at least to a suitability standard.

    The question of whether customer-facing employees at discount brokerages should be subject to the fiduciary standard is looming on the horizon in Washington, D.C. I'm not aware of anyone pushing the issue, though.
    Aug 22, 2011. 07:09 PM | Likes Like |Link to Comment
  • 10 Signs of a Bad Investment Advisor: Part II [View article]
    Thanks for all the thoughtful comments. There's plenty of room for disagreement and discussion on this topic, as befits an evolving profession. @badsey: I agree that people need a financial plan, but I wonder if an investment advisor can function as a fiduciary as long as he/she has an assurance that the clients has such a plan. @badsey and hvp191: Even a principles-based fiduciary standard has to be backed up by some amount of reasonable regulation and enforcement ... it's not, at the moment, or wouldn't have ended up with a Madoff run amok for so long.
    @windsun33: The mutual fund industry lacks transparency to such a degree I'm not sure we can even evaluate active versus passive management very well. Plenty of room for disagreement there, too.
    Aug 17, 2011. 01:54 PM | Likes Like |Link to Comment
  • 10 Signs of a Bad Investment Advisor: Part 1 [View article]
    I agree completely that money managers and investment advisors should eat their own cooking. @Paulo, I think that's a great point, and one I haven't thought about before.
    Aug 11, 2011. 10:35 AM | Likes Like |Link to Comment
  • Men, Women Prone to Different Types of Investing Mistakes [View article]
    Jan, what do you find the main issues that women are concerned about to be?
    Aug 4, 2011. 10:22 AM | Likes Like |Link to Comment
  • Jim Cramer's Mad Money Diversification: An Idea Gone Astray [View article]
    Andi and Donald were able to bring some clarity to the question of diversification amid a world of confusion around the topic. Glad the interview could help.
    Jul 21, 2011. 12:23 PM | Likes Like |Link to Comment
  • Diversification: Individual Stocks as a Proxy for Financial Sector ETFs [View article]
    Thanks for the reminder for investors to look under the hood -- where they might discover, for instance, that financial sector ETFs seem to be heaviest in some "lousy" companies. Investors are jumping into ETFs as an alternative to mutual funds, but they still need to be treated with caution, like any other investment.
    Jul 19, 2011. 12:28 PM | 2 Likes Like |Link to Comment
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