How Well Do Advisor Recommended Portfolios Perform?
By Hal M. Bundrick
NEW YORK ( MainStreet) -- Just how good is the investment advice consumers receive from a financial advisor? A group of industry leaders is proposing a new performance standard to help consumers find out. The "Universal Advisory Performance Standards" would allow investors to compare results based on the performance of advisor recommended portfolios - before the advisor is hired.
A white paper proposing the new performance reporting standard has been issued by the investment research company BrightScope and The Spaulding Group, an investment performance measurement firm. An advisory board backing the initiative includes representatives from major brokerage and advisory firms and industry associations, including Morgan Stanley, Merrill Lynch, Morningstar and the American Society of Pension Professionals & Actuaries.
"Investors are able to search for and compare the merits of mutual funds, insurance policies and many other types of financial products before making a purchasing decision. However, when it comes to their most important financial relationship - their financial advisor - they are frequently unable to evaluate the advisor's background or investment performance in advance of hiring him or her," the group states in the report's introduction.
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