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Page history last edited by Gene Lipitz 8 years, 4 months ago

The Right to Clarity

Transparency is a fundamental element of the relationship between my adviser and me. I must be able to understand the terms of our relationship and their capabilities and limits. We work from a clear and measurable plan. At all times, I must be able to understand what my assets are and how I am doing, and I must have a deep awareness of the risks I face.

A. Relationship Between the Adviser and Me

  1. I understand my obligations to my adviser – contractually, legally, and ethically.
  2. I understand the adviser’s obligations to me – contractually, legally, and ethically.
  3. I understand all the fees I will pay the adviser and all the other costs I will incur from my work with the adviser.
  4. I will not receive a bill or invoice that exceeds the adviser’s estimate unless I have approved the increase in advance.
  5. I understand the full extent and sources of my adviser’s compensation from other sources that involve, influence, or intersect with my account. Is my adviser compensated adequately on client retention versus acquisition?
  6. I understand all of the adviser’s relationships that impact my accounts.
  7. I understand the extent of the adviser’s discretion over my assets.
  8. I understand all of the adviser’s communications, workflow processes, and deliverables that materially affect my accounts.
  9. I understand the termination options and timing details of our agreement.

B. Capacity and Capabilities of the Adviser

  1. I understand the true extent and capabilities of my adviser’s team, systems, expertise, and other resources.
  2. I understand the advisory firm’s general financial health and stability.
  3. I understand the advisory firm’s ownership and governance structure.
  4. I understand the adviser’s general priorities, succession plans, and vision for the future of the firm.

C. Goals and Objectives

  1. We have built or are working from a clear, mutually agreed-upon plan with long-term goals, short-term objectives, and concrete success measures.
  2. The total  and ongoing cost of solutions presented to accomplish goals are presented to me.
  3. Potential risks are clear and nothing is left out because "that's never happened before"

D. What I have and how it’s doing (Reporting)

  1. I receive accurate, timely, comprehensive valuation statements, and I have the opportunity to discuss them thoroughly with my adviser.
  2. I receive accurate, timely, comprehensive performance reporting, before and after fees, and I have a good sense of what I have earned after-taxes.
  3. My adviser ensures that I understand how to read all aspects of the reports they give me.
  4. I receive accurate, comprehensive performance attribution reports with institutional-class risk analytics.
  5. I receive accurate, comprehensive performance reporting on an after-tax basis.

E.  The risks I face

  1.  My adviser clearly expresses his or her perceptions of the investment risks I face and suggests alternative strategies.
  2. My adviser clearly expresses his or her perceptions of the non-investment risks I face and suggests ways to mitigate those risks (including referral to other advisers.)


Key Questions 

1. Will I know what my goals are and whether I am achieving them?


Home: Rights and Obligations


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