When my daughter was two, she was cared for by a nanny who referred to my daughter and her other charges as her “clients.” It was a telling choice of term.
My daughter’s nanny was a professional who took her job and her responsibilities seriously. At the end of every day, she would present my wife and I with a detailed timesheet that recorded all the activities of the day — at roughly 15 minute intervals.
I confess that I didn’t always read these multi-page timesheets carefully, but they nevertheless meant a great deal to me. They were evidence that she was totally focused on the needs of my daughter (as opposed, say, to watching daytime soaps). There was comfort in this level of transparency that transcended the details themselves. It took the mystery out of what was going on when we weren’t in the room. I knew that our daughter was in wonderful hands.
Trusting another with your child requires a high degree of confidence. So does trusting another with your wealth. But, how many investors really know what their advisors do? And how much comfort would investors gain from transparency that lets them know their advisor is working hard and adding value.
High transparency is becoming the new baseline in wealth management. Top practices record explanations for every trade. They document the value of their tax management. They review every account daily — and show clients that this is being done. They show that if a portfolio review highlights an issue, that issue is resolved. Like our nanny, they show clients a record of continuous care, and that makes all the difference (though unlike our nanny, they don’t do it manually — all this information is recorded automatically).
This type of transparency reporting builds trust and instills comfort. It reassures investors that their portfolios — like their children — are in good hands.
For more on this topic, check out Automated Rebalancing & Specialization.
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