Advisors Should Seek Lead Roles, Study Says
The mistrust and uncertainty investors have experienced since the recent financial crisis extends beyond markets, regulators and ratings agencies, right down to the people they once believed in the most: personal financial advisors. According to a recent study, many investors no longer trust the advice they were given, or the products they were sold. As a result, they have pulled money away from their advisors in order to manage it themselves or redirect assets to other-often multiple-advisors, whom they perceive as being more independent and better able to provide customized advice. The results have been sometimes unfortunate, for investors and advisors alike, according to the study.

The research report, Taking on the Role of Lead Advisor: A Model for Driving Assets, Growth and Retention, a collaborative effort between State Street Global Advisors, the asset management business of State Street Corp., and Knowledge@Wharton, an online resource of The Wharton School at the University of Pennsylvania, explores the post-recession investor-advisor relationship, the unintended consequences of using multiple advisors-a lack of communication has led many investors to actually increase risk rather than dilute it, the study notes-and the unique opportunities presented to investment professionals who are willing to take on the lead advisor role. Here, a single advisor oversees the entire investment portfolio to ensure that it is structured in a way that best supports the investor's short- and long-term goals-all while avoiding multiple-advisor pitfalls and rebuilding the trust of emerging affluent investors, which the study deemed "a grossly underserved market segment."

"The role of lead advisor creates a critical competitive advantage at a time when investors are searching for customized financial solutions they can trust," said Anthony Rochte, senior managing director at State Street Global Advisors. "The early movers toward the lead advisor model are positioned to offer a superior level of service that could ultimately lead to a more profitable, rewarding practice."

The study culled data from interviews with over 800 investors of various wealth levels and more than 2,000 advisors with clients of varying asset levels. It showed that 49% of investors manage their own investment portfolios, 34% work with one advisor, and 17% work with two or more advisors (44% say the reason is to diversify risk; 55% admit that their primary advisor is not aware that other advisors are also managing their assets). Half of those with no financial advisor say they don't believe the value that advisors provide is worth the cost.

It was learned, perhaps not surprisingly, that ultra-high-net-worth investor respondents who work with multiple advisors were more likely than investors with fewer assets to have a primary advisor who was both aware of the other advisors and could offer insight into their decisions and performance. Through interviews with leading family office advisors and wealth managers who serve UHNW investors (segments the report's collaborators noted are known for exemplary service in the delivery of holistic and highly customized advice), the researchers uncovered the best practices that typically result in higher client retention rates and greater satisfaction levels, regardless of the market's performance. Details of these and related findings are contained in the report, along with survey data regarding investors' expectations for service from their advisors. For access to the full report, go to

In other news ...

Pershing LLC, a unit of BNY Mellon, has formed a strategic alliance with Roubini Global Economics, an independent economic research firm led by renowned economist Nouriel Roubini. The alliance will provide Pershing's hedge fund, broker-dealer and RIA customers with exclusive research and analysis on trends and developments shaping the global economy. The first proprietary report is titled States and Sovereigns: Eurozone and U.S. State Debt Woes. For information and to download a copy of the study, go to

Generational Equity, a Dallas-based advisor to privately held and family-owned businesses for mergers, acquisitions and exit strategies, has sold its client MedSolutions LLC to a private investor. In addition, Generational Equity has sold Neill Supply Company Inc. to Long Island Pipe Supply Inc.; and Techni-Lite Systems Inc. to Lynx Equity Limited. Generational Equity uses a four-phase approach that includes education, financial analysis and reporting, sales documentation and deal-making on behalf of its clients, according to the company. Go to for further information.

The universe of alternative-investment moguls turned sports-team owners has just expanded, with the agreement reached by billionaire Tom Gores, head of private equity firm Platinum Equity, to buy the NBA's Detroit Pistons for around $360 million. The firm will itself become a minor owner when the deal is completed at the end of June, according to FINalternatives (, which noted that last month, Junction Investors' Thomas DiBenedetto reached a deal to buy Italian soccer team AS Roma, with Raptor Capital Management founder James Pallotta among his minority partners.

U.S. Bank's plans to expand its wealth management group, U.S. Bancorp Wealth Management, include hiring financial advisors as well as professionals with backgrounds in psychology and genealogy to help its ultra-high-net-worth clients better understand their family histories, according to the Wall Street Journal. "We are hiring as fast as we can," said Mark Jordahl, president of the wealth-management unit.

Domini Social Investments' Domini Social Equity Fund ranked in the top 10% of its peer group for the one-year and three-year periods ended March 31, according to the Providence, R.I.-based firm (, which credited the fund's strong performance to its partnership with Wellington Management Company, sub-adviser to the fund since November 30, 2006.

Most affluent families and family offices continue to adopt a highly defensive posture with respect to investments, risk management, security and privacy, according to Handler Thayer LLP, a private-client law firm based in Chicago whose clientele include foundations, prominent entrepreneurs, celebrities, pro athletes and family offices. The firm's Advanced Planning & Family Office Practice Group ( offers its "family office outlook" for 2011, and touts the benefits of such organizations as the Alliance Security Council (, which helps the wealthy guard against threats related to cyber-security, personal security, reputation, privacy and confidentiality.

Gemini Fund Services LLC of Hauppauge, N.Y., an engaged partner to independent advisors as a provider of comprehensive pooled-investment solutions (including hedge funds, mutual funds, and alternative funds), in the first quarter of 2011 has helped advisors develop and launch seven alternative mutual funds for their high-net-worth clients. For further information about these funds, go to

Fewer than half (49%) of very wealthy parents in a nationwide survey said it is important to leave a financial inheritance to the next generation even though they consider the success of their children to be one of the most important measures of their own success, according to the report 2011 U.S. Trust Insights on Wealth and Worth, published on Tuesday by U.S. Trust. Among other findings: Many HNWs surveyed have only basic financial and estate plans that do not reflect the current complexity of their financial lives or adequately account for unexpected factors that could wipe out a large portion of their assets. Go to for further information.

Hedge funds, as measured by the recent Dow Jones Credit Suisse Hedge Fund Index, posted positive performance in March, up 0.12%, with five out of ten strategies in the index posting positive performance for the month. Emerging markets was the best performing sector in March, up 2.12%; equity market neutral managers finished the month up 1.11%; and global macro managers were up 0.15%. Go to or for further information.

New York-based Fine Art Asset Management LLC, a subsidiary of Emigrant Bank, has introduced an expanded suite of advisory and appraisal services designed for collectors, institutions, attorneys and estates. The company plans to use its expertise in both art and finance to help clients understand the advantages and disadvantages of selling (services include negotiating sale agreements), financing, gifting or doing like-kind exchanges "so they can make informed decisions about this complex and increasingly valuable asset class," said Fine Art Asset Management's president, Andy Augenblick. Go to for further information.

Revenue and profit at Wells Fargo & Co.'s wealth, brokerage and retirement division rose in the first quarter of 2011 as fees and commissions increased with rising markets, according to the company. Revenue across the three businesses climbed 8% from a year earlier to $3.2 billion, while earnings from fees based on client assets rose 15%. The division posted net income of $339 million, up 20% from a year earlier. Go to for further information.


The 49 North Resource Conference will be held April 26-27 at The W Hotel in New York. The event, sponsored by Merriman Capital, will enable investors and others to meet with top exploration and production companies across the natural resource sector. Go to for further information. 

The Skyline Inaugural Executive Summit Seminar-"Looking Ahead to 2012"-will be held on April 28 in High Point, N.C., with a focus on entrepreneurship and the economy. For more information, go to

The MDB Capital Group Bright Lights Conference will be held in New York City on May 10-11, featuring an address by David Kappos, Under Secretary of Commerce for Intellectual Property, speaking about the vital role played by IP in today's economy. Go to for further information.

The 13th Annual D.A. Davidson & Co. Financial Services Conference will be held May 11 at the Bell Harbor Conference Center in Seattle, Wash. For further information call (503) 619-4948, or go to

The 2011 British American Business Council Transatlantic Conference: The Impact of Innovation will be held May 11-13 at the Fairmont Hotel in San Francisco, featuring thought-leaders representing sectors ranging from finance, law and the environment to technology and biotech. Go to for further information.

The Wealth Advisor Forum, hosted by Family Office Exchange, will be held May 18-19 at the JW Marriott in Chicago. Contact Karen Emanuelson at 312-327-1244 for information, or go to

The 5th Andean Investment Forum will be held at the Centro de Convenciones Cartagena de Indias on June 9-10 in Cartagena, Colombia. Sponsored by Bank of America Merrill Lynch, Credit Suisse, Itau BBA, KPMG, TMX, Fitch Ratings, Mizuho, and Standard & Poor's, the forum will feature discussion panels and workshops on capital markets investment and financing in the Andean Region. Go to for further information.

The Financial Services Outsourcing 2011 Conference, organized by Global Leaders Institute and Shanghai Finance Magazine, will be held June 22-24 in Shanghai, China. Go to for further information.

On The Move

FBR Fund Advisers, part of Washington, D.C.-based FBR Capital Markets Corporation, has appointed Nory Gonzalez (previously with Genworth Financial), Dale Van Scoyk (previously at Thornburg Investment Management), and Jay Pearson (previously with Thornburg Investment Management) as advisor relationship managers, responsible for the New York market, Southeast Region, and Midwest Region respectively.

GenSpring Family Offices, a wealth manager for ultra-high-net-worth families based in Palm Beach Gardens, Fla., has named Jean Brunel as chief investment officer at the firm's Investment Advisory Center, which follows his appointment in January as chairman of the Strategic Investment Advisory Committee, of which he has been a long-time member. Brunel will also work with GenSpring's head of investments, John Elmes. Prior to joining GenSpring, Brunel was the managing principal of Brunel Associates, a consultant to ultra-affluent individuals, and before that worked in the investment management group of J.P. Morgan.

-Cort Smith