The Holy Grail Of Objectivity
Achieving objectivity and placing client needs first should, in theory, not be a very difficult thing for advisors to do. "Aligning client and advisor interests should not be that tough a challenge," wrote the Canadian finance blogger and columnist Jonathan Chevreau. But apparently it is.

New research shows that while both investors and wealth managers agree that objectivity is actually more important than the investment management process or the delivery of products and services, enough advisors have trouble making the clients-come-first concept a reality to be cause for concern.

According to Objectivity and the Client Experience, a global report produced by Oaks, Pa.-based wealth manager SEI that examines what clients expect from their advisors, some advisors "struggle" to demonstrate objectivity not only in the delivery of services but in terms of investment management.

Published in collaboration with London-based wealth management consultant Scorpio Partnership, the study was based on interviews of 250 private clients and wealth management providers, including banks, independent trust companies and investment advisors. When asked how they define the term "objectivity," 39% of investors and 31% wealth managers ranked as their top definition wealth managers' ability to understand the "situation and needs" of their clients. Other definitions centered around various investment-related practices, such as wealth managers being unbiased as investment managers.

Jim Morris, senior vice president for SEI's Global Wealth Services, noted that while "independence" has long been an industry buzzword, "objectivity" is emerging as an equally important topic. "Whereas independence is more closely related to ownership and conflicts of interest, objectivity is associated with advice, which is at the heart of what wealth managers provide to their clients," he said. "By being more client-centric and placing clients' goals and objectives at the forefront of the investment process, wealth managers will not only survive in this industry, but thrive in the face of growing competition and industry challenges."

While it may be apparent that a client-centric approach can make the difference between clients having a positive or a negative experience with a wealth manager, the report points out that wealth managers have yet to successfully find a way to consistently demonstrate client-centric objectivity. When asked how they might solve this problem, wealth managers tended to move quickly from addressing client-focused strategies and back to the comfort zone of services and product selection. The report shows that of all North American firms surveyed, only three mentioned in-depth investor risk profiling-regarded as an important way to assess client needs-as a strategy to delivering objectivity.

To see the full SEI report, the third in a series of five that explores the changing relationships between wealth managers and clients, go to

In other news ...

Orinda Asset Management LLC, an independent, privately-held asset management firm based in Orinda, Calif., has launched the Orinda Multi-Manager Hedged Equity Fund, for which SkyView Investment Advisors, an institutional multi-manager hedge fund advisory firm headquartered in Shrewsbury, N.J., will act as lead sub-adviser. The fund seeks long-term capital appreciation with an emphasis on risk-adjusted returns and reduced volatility compared to traditional broad-based equity market indices, and will employ various long/short equity investment strategies, according to Lawrence Epstein, Orinda's CIO. For further information go to and

The median value of salaries, bonuses and long-term incentive awards for CEOs of 350 major companies surged 11% to $9.3 million, according to a study of proxy statements conducted for The Wall Street Journal by management consultancy Hay Group, the newspaper reported. The sharpest pay gains among CEOs surveyed resulted from bonuses, which soared 19.7% as profits recovered, especially in some hard-hit industries, according to the article. Viacom Inc. CEO Philippe P. Dauman topped the list with compensation valued at $84.3 million, more than double his 2009 pay, thanks largely to equity awards in a renewed contract. Eclipsing compensation were profits and share price increases: Net income rose by a median of 17%, while shareholders at companies surveyed enjoyed a median return, including dividends, of 18%.

Hedge funds returned 1.4% in the first quarter, but jumped 1.69% in the first month of the second, according to Greenwich Alternative Investments. The Greenwich Global Hedge Fund Index more than doubled its year-to-date return last month to 3.25%. Still, the benchmark badly trailed the Standard & Poor's 500 Index, which returned almost 3% in April alone and is up about 9% on the year, said the company. Go to for further information.

Barclays Wealth remains big on equities. Their moderate-risk portfolio recommendations for May suggest a 43% allocation to developed markets equities and an 8% allocation to emerging markets equities, according to the company's recent Compass report, which states their belief that bonds face the biggest cyclical and valuation headwinds. To read the full report, go to

Goldman Sachs Asset Management LP has launched the Goldman Sachs Brazil Equity Fund and the Goldman Sachs China Equity Fund, which seek to achieve long-term capital appreciation by investing primarily in local Brazilian and Chinese equities. According to the company, the funds will be managed by Goldman Sachs Asset Management International equity teams in Brazil and China. The funds are offered in A and C Shares, both with $1,000 minimum initial investments; institutional and R and IR Shares are available as well. .Go to for further information.

The TNS Investor Confidence Index, a product of TNS' affluent market research program, shows a decrease in confidence among affluent investors. In its first decline in nearly a year, the index dropped to 113 in April (from a reading of 119 in January). Concerns over the direction of the economy and the erosion of the stock market, despite overall investor confidence remaining in positive territory, are among contributing factors, said New York-based TNS. Eight in 10 investors surveyed (with investable assets of $500,000 or more) now agree that their financial providers work with their best interests in mind, according to the report. Go to for further information.

Credit Suisse has released the second quarter 2011 edition of its Asset Management Alternatives Quarterly, a thought leadership series offering investors insight on economic trends and capital markets around the world along with the views of the firm's leading alternatives portfolio managers. Highlights include the optimism expressed by managers in the event-driven hedge fund space, and the precautionary measures being taken by private equity investors in the face of a possible rise in inflation. For a copy of the quarterly report, contact

ARIS, the sole underwriter of ATPI art title insurance, has warned that financial advisors are not prepared to manage wealth in the form of fine art and other important collectibles. Escalating art values and rapidly evolving legal theories have expanded the complexities of art title risks. The application of traditional financing and investment strategies to art as an asset class has added new exposures as well, ARIS cautioned. Go to for further information.

The Dow Jones Credit Suisse Core Hedge Fund Index finished up 1.44% in April, following a downturn mid-month, according to Oliver Schupp, president of Credit Suisse Index Co. LLC. Managed futures was the best performing sector, gaining 4.78% for the month as trading models successfully picked up on reversals in market movements across sectors, he said. Go to for detailed performance listings.

Magellan Jets, which provides private jet charter and travel services, has partnered with (, a members-only travelers information Web site, to offer their 25 Hour Jet Cards at a special rate exclusively for Jetsetter members. According to Boston-based Magellan (, this is the first time that a private jet company is being featured on a luxury retail Web site.


Noble Financial Capital Markets' Seventh Annual Equity Conference-"SEVEN"-will be held on May 16 at the Seminole Hard Rock Hotel & Casino in Hollywood, Fla. Go to further information.

The Morgan Stanley 2nd Annual Hong Kong Investor Summit will be held May 16 at the Morgan Stanley ICC Conference Center in Kowloon, Hong Kong. Go to for further information.

The 2nd Annual Wealth Management & Family Offices Forum will be held in Athens, Greece, on May 17, bringing together top minds and professionals within the wealth management and private banking sector from Europe and the U.S. to help wealthy investors make the most of their wealth management decisions. Go to for further information.

The 8th Annual Piper Jaffray China Growth Conference will be held May 17 at Le Parker Méridien in New York. Go to for further information.

WomenCorporateDirectors, a global organization of over 1,000 women directors representing 1,200 companies from around the world, will hold its first (invitation-only) WCD Global Institute May 17-18 in New York City, addressing the theme, "The Director's Role in an Age of Complexity, Uncertainty, and Accelerating Change." Go to for further information.

The Oppenheimer 5th Annual China Dragon Conference will be held May 17-19 at Oppenheimer's 300 Madison Avenue offices in New York City. The conference will provide access to an array of Chinese companies while helping investors identify trends and opportunities there. Go to for further information.

The 2nd Annual DB Access Asia Conference 2011: Opening Doors, Unlocking Value will be held May 23-24 at Marina Bay Sands in Singapore. Go to for further information.

Morningstar's 23rd Annual Investment Conference will be held June 8-10 at McCormick Place Convention Center in Chicago. Keynote speakers include Bill Gross, founder, managing director and co-chief investment officer of Pimco; Laurence Fink, chairman and CEO of BlackRock; and David Laibson, Harvard University professor of economics. Go to for further information.

The Dow Jones Private Equity Analyst Limited Partners Summit will be held on June 28-29 in New York, bringing together leading limited partners for discussions on the state of alternative investing, venture capital buyout and other pressing issues. Go to for further information.

On The Move

Arabella Advisors, Washington, D.C., a philanthropy services firm that supports individual, family, institutional and corporate philanthropists, has acquired San Francisco-based Blueprint Research + Design Inc., providing Arabella a presence on the West Coast. Blueprint's founder and President Lucy Bernholz, Ph.D., will also join Arabella.

Cutwater Asset Management, a fixed-income investment manager based in Armonk, N.Y., has appointed Nobel Prize-winning economist Myron S. Scholes as a member of its board of managers. Scholes is the Frank E. Buck professor of finance, emeritus, at the Stanford Graduate School of Business, and co-originator of the Black-Scholes options pricing model. Awarded the Nobel Prize in 1997 for his new method of determining the value of derivatives, he currently serves as chairman of the Board of Economic Advisors of Stamos Capital Management, sits on the board of Dimensional Fund Advisors, and is an outside director of American Century Mutual Funds.

BNY Mellon has named Mitchell Harris to the newly created position of president of its investment management division, which comprises BNY Mellon Asset Management and BNY Mellon Wealth Management. Harris, who had been interim head of the asset management business, also was named to BNY Mellon's executive committee.

Neuberger Berman Group LLC has appointed Leah Modigliani to the newly created position of senior vice president and multi-asset class strategist. Modigliani most recently served as an independent investment strategist, advising non-profits, foundations and endowments on portfolio construction and management.

JTF Private Wealth Management, an affiliate of New York-based John Thomas Financial, has appointed Richard Urbealis, former president of Private Client Group, LLC, as president. Urbealis held executive roles at 1st Global, Inc., Capital Professional Partners, LLC, and served as vice president at Merrill Lynch & Co. and senior vice president at Guardian Life Insurance Agencies.

First Republic Private Wealth Management has hired Nic Donarski, a former senior vice president at Banc of America Investment Services, as managing director; and Chris Rusk, a former assistant vice president at Merrill Lynch Global Wealth Management and Banc of America Investment Services, as vice president. Both will serve at the firm's New York office as wealth advisors.

The global law firm Duane Morris LLP has appointed Michael Grohman as managing partner of its New York office, succeeding Robert Hasday, who served in that role for 17 years. Grohman is also chair of the Duane Morris Wealth Planning Practice Group.

SunTrust Banks Inc., headquartered in Atlanta, has acquired the assets of CSI Capital Management, a San Francisco-based wealth management firm with a focus on the financial and investment needs of high-net-worth-clients, including highly visible professional athletes. The acquisition expands the presence of SunTrust's Private Wealth Management division in Los Angeles and Atlanta; adds offices in Greenwich, Boca Raton, and San Francisco; and bolsters its roster of music, motorsports and film clients.

-Cort Smith