Trusts and Estates > Investments > Rating the Quarterback

Apr 1, 2005 12:00 PM

Rating the Quarterback

By Jeffrey L. Evans, consultant, Institute for Private Investors, New York

Who do wealth owners trust most for financial advice? Outside their family officers, it's their lawyers and accountants. Clearly these advisors are not experts in the stock market. But what they can bring to the table is independence, strategic expertise and now — with a new tool developed by a Wharton School professor — the ability to evaluate the investment counselors who are acting as quarterbacks for wealthy clients' portfolios. This tool, called “Alpha Star,” enables those who are not finance wizards or even number crunchers to plot the performance of investment counselors on a simple graph. Interestingly, Alpha Star also helps show whether the risk these quarterbacks are taking is worth the returns they generate.

In 2002, the New York-based Institute for Private Investors (IPI)1 asked its investor members (at that time, 274 IPI families with a minimum net worths of $10 million and an average of well over $50 million2) where their most-trusted financial advisor worked (not counting their own family office). The answer “law firm” tied with “accounting firm” for the most mentions, edging out even investment advisory firms.3

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2010 Tax Act News Industry Trends Surveys

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