This Fund Would Be Perfect For You!
“Check this fund out. It would be perfect for you and your personal portfolio.” This is the kind of statement that makes an individual investor feel all warm and happy. It shows that the individual delivering the message has studied your needs, understands the fund and that you have built up over time a relationship and a well-defined set of goals that are well understood. This recommended fund would help attain those goals that have been planned, studied and balanced against risk. Possibly, the recommender has also seen how this fund stacks up against your other holdings and how this fund fits within your “team” of funds. Hearing those words makes me, as an investor, feel good about the opportunity in front of me.
Just one issue with this particular instance…I had met this individual approximately 4 minutes prior. I am not sure I even shared my name let alone my age, goals, risk tolerance, current financial condition or my financial goals. I was maybe with him for about 2 more minutes. I didn’t press him on the recommendation. I took the literature, thanked him for the information and headed on my way. I will review it and look into how the fund might fit within my needs. I will share the information, if I’m still interested, with my advisor.
The fund may be spectacular. It may be exactly what I need and want in my portfolio. My advisor may even present this fund to me for inclusion within my portfolio. Once my trusted advisor is able to answer the real complex questions around how it aligns with my goals I will consider it or any fund that helps me achieve those goals.
At a First Rate Conference a couple years back Stephen Campisi made a statement that I immediately recalled after my conversation about this fund. Campisi (paraphrasing) stated that you should not look for an all-star fund/position/manager but to look at how the players all act and react together. This fund may be a solid team player within my current lineup. Maybe it won’t be. I look forward to spending more time trying to figure this out than the recommender spent in finding the “perfect” fund for me.
Patrick Flaherty, CIPM, is the Product Owner for CORE Performance and Integrations as well as the GM of Fee Manager. In addition to shaping the strategic direction and development of both products, Patrick is responsible for overseeing the operations of the Fee Manager business unit including developing and maintaining client and partner relationships. In 2011, he completed the requisite study and exams for the certificate in investment performance measurement (CIPM).