Advice for Financial Advisors

Most affluent retirees want more than just investment management from their adviser, according to a survey released by Sallie Krawcheck’s wealth management group at Bank of America Corp. (Well-off retirees: We sought financial advice too late, Investment News, 1/14/10) According to Ms. Krawcheck, this is an opportunity for financial advisors, “what we’re learning is that our business is really becoming a business of solving problems with people.”

Financial advisors might also spend some time advising shareowners on where to find impartial information on how to vote. With voting down to 4% among retail shareowners only getting notice and access, they obviously need help. Advisors could point clients to sites like ProxyDemocracy and MoxyVote that disclose how institutional “brands” are voting or provide voting recommendations of “advisors.”

Financial advisors should also warn their clients that those who those who hold securities under “street name registration” only hold “security entitlements,” not real shares. SEC laws and regulations are written to protect shareholders, not those with security entitlements.

Therefore, Broadridge and others interpret requirements that apply to proxies as not applicable to their “voter information forms.” Counting blank votes for management, with only a microtype warning on the ProxyVote screen and summarizing resolutions so voters can’t even guess the subject are abuses that would end with a system of direct registration and the use of actual proxies.

Advisors could further gain the trust of their clients by educating them a little on their role as owners, instead of being completely focused on asset allocation, when to buy, and when to sell.

, ,

Comments are closed.

Powered by WordPress. Designed by WooThemes