In the interest of science and to fulfill my solemn obligation as a financial journalist, last week I took my family to the Gulf Coast of southern Florida to study the habits of rich people on vacation.

It was pretty rough duty, but sometime between the $140 jet-ski tour of North Captiva Island, the $90 round of nine-hole golf and the $9 lava-colored poolside drinks, a blinding insight hit me like a triple shot of Jamaican rum: The wealthy must have done something right in their financial lives to have the opportunity to enjoy themselves at such a spending clip.

The Very Rich Are Different From You and Me

Middle-class Americans have a love-hate relationship with the well-to-do. We mock their pretentious, wasteful ways but spend much of our time as employees and investors scrambling to join their ranks.

Fortunately, more of us are making the leap. A recent survey reported that there are 2.5 million individuals with liquid assets in excess of $1 million in the U.S., and 6 million with assets of $1 million if you include their homes. That may not sound like a lot in a nation of more than 240 million people, but it's up sharply from a decade ago, even amid the bear market.

After your first million, you may be pleased to learn, the path to further wealth should become easier. The masses have to settle for picking among 10,000 mutual funds, relying on a brother-in-law's hair stylist's aromatherapist's recommendation for a stockbroker, or scouring sites such as this one to choose among 7,500 stocks traded on the major U.S. exchanges. Screening engines assist in the hunt -- and quantitative systems such as Value Line's timeliness rankings or Morningstar's star system can play a role -- but essentially, the hoi polloi are on their own.

When you cross the golden line and find yourself worth at least seven figures -- the term of art these days is "high net worth" -- you may discover, as many of your kind have recently, that you qualify to hire a private money manager who is independent of brokerage underwriting entanglements and who has a laser-like focus on a single strategy that suits your temperament. Why concern yourself with the time- and emotion-draining decisions to buy or sell securities, after all, when you've got a 10 a.m. tee time?

An Independent Source

Finding a decent money manager has its own perils. These rascals have to register with state, federal and professional authorities, but it's been tough to compare their abilities. If your brokerage has sent you a fancy invitation to join its high-roller "wrap" program and offered to land you a private, fee-based manager, there has been no way of determining whether his or her impressive performance has been better than that of 1,200 peers around the country.

So if you're just starting out on your quest to join the Captiva Island regulars, you're in luck. Last year a company called Prima Capital introduced a comprehensive database containing the results from 400 handpicked money managers. So far, the database is only available to financial advisers at fees upward of $2,500 a year, but if you're in this league, you're probably already working with one. Now you just need to harangue him or her to subscribe.

The Denver-based firm's PrimaGuide is a Web-based application that provides quantitative and qualitative information on private managers much like Morningstar's Principia Pro provides information on mutual funds. Older products from companies such as Nelson Information have for a while enabled financial advisers to screen for the best-performing small-cap value manager who has been in business seven years, has a tax-efficient style and chews spearmint gum. But that information was based on surveys filled out by the money managers themselves.

Prima appears to be the first objective, independent organization to offer qualitative, first-person reports on independent money managers as well. Its 12-factor model enables users to identify the money managers specializing in each asset class who are most likely to sustain their past records. J. Gibson Watson III, president and founder of the firm and a former KPMG national managing director, says his proprietary approach -- combining regression analysis and a personal touch -- is aimed at seeking managers outside the wirehouse wrap-account mainstream who are capable of outstanding "repeatable performance."

That's the holy grail, and it's too early to tell whether it's been achieved. Prima is in for some competition soon from Morningstar, which plans to roll out a rating system of its own this summer. Morningstar's system has caught flak from the Money Management Institute, a trade organization whose members have expressed concerns over how the performance of private accounts -- in which clients have some control over trading -- should be measured.

In Search of Transparency

Yet both aim at a noble goal: transparency in an otherwise opaque profession. Jane-Ellen Wolak, a financial advisor and CPA at Mosaic Financial Group in Chicago, has been using the PrimaGuide for the past year, and says she depends on it for an added layer of due diligence.

Unlike the brokerages, she says, Prima "has no ties to anybody -- they're 100% objective and unbiased." Brian Boyle, an analyst at DeWaay Capital Management in West Des Moines, Iowa, told me he started using the PrimaGuide to find money managers after well-to-do clients were slammed with outrageous capital-gains charges on money-losing mutual funds in 2000 and 2001.

In Boyle's view, the economics of moving to private account management is compelling. While the average mutual fund charges 1.6% of assets (otherwise known as an expense ratio of 1.60), private-account managers charge an average of 0.75% of assets.

Even after adding the 0.5% charged by financial advisers and the 0.15% charged by portfolio custodians such as Charles Schwab, the separate-account route can end up costing less. And you have the considerable plus of customized tax efficiency and the ability to tell the manager you don't want to own any manufacturers of tobacco, guns, birth-control pills or leaf-blowers.

I spent a couple days clicking through PrimaGuide and found rich reports on dozens of managers I had never heard of in two decades of reporting. Generally, it seems that many of the leading specialty separate-account managers keep a low profile, refraining from marketing to the press or the public.

For instance, the small-cap value shop in the database with the best 10-year record, Private Capital Management in Naples, Fla., is managed by a couple of gentlemen who don't appear to have given any interviews to the major New York financial media in the past decade. Their fund was up a bunch in every one of the past 10 years and didn't flag during the drought years for most value managers -- 1998 and 1999 -- because of investments in onetime-value stocks such as Qualcomm ( QCOM).

In summary, if I had $250,000 or more to invest and no interest in doing it myself, I would strongly consider finding a financial adviser with access to the PrimaGuide to seek help in pinning down private bond and equity managers with strong long-term, tax-efficient track records in good times and bad. And then I would upgrade my Captiva Island reservations next year to the oceanfront villas.
At the time of publication, Jon Markman owned shares in none of the equities mentioned in this column.

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