Smart money: Still spooked? (Part II)

William C. Fisher
William C. Fisher
Looking again at the “spooky” economic climate that seems to have dominated conversation lately, you'll recall that Phil Jacobson of United Capital Financial Advisors (a firm that Investment Advisory Group is affiliated with) asked attendees some questions at a recent financial conference.  Here are more of the questions, responses and our brief insights:

1. How often does the CFO meet with members of the finance committee?

The answer was that 42% meet only once or twice per year. While actual meetings may be this infrequent, we find that senior living management often speaks with board members on a more regular basis. Current market conditions require more attention to investments, market economics and reviews of the investment portfolio, making frequency of communications important.

2. How is the advisor/consultant paid?

Responses included 14% who did not know (that's bad); another 14% said commissions and transactions fees (which might cause more activity than necessary in the accounts); 32% charged a flat fee (this is often what consultants   charge for time and expenses); and 40% were charged based on assets under management (generally regarded as the best payment method for the CFO and finance committee since pay is aligned with investment performance).

When sufficient attention is given to the investment policies and the investment portfolio, the CFO and the finance committee should be better prepared for future economic times. Remember to be flexible in your communications so your responses to economic events will be timely and appropriate.

Some of the survey responses about what other financial executives are doing regarding their investments were very interesting. Hopefully, the ideas I've presented will affirm the policies you currently have in place — or at least provide you with some wisdom as you create new policies.

William C. Fisher is president of Investment Advisory Group LLC, a business development company partnering with some of America's leading financial companies to provide independent financial services to nonprofit organizations.