Integrity Matters Broadcasts
March 1, 2005
Investment Integrity
Dear Friends:
Investment integrity can be both a
personal and an organizational concern. On the personal
side, it is important to find the right formula for leveraging
one's wealth, whatever its size. It is also essential,
when entrusted with investment dollars from others, to
be prudent and productive with their trust, returning to
investors a reasonable profit, consistently. A wise associate
once said that making money was only a part of the task;
the harder work, he insisted, was keeping it.
Expanding the integrity conversation is
our business. We are not investment counselors. However,
we are, on occasion, asked to offer guidance, regarding
assessing the integrity and effectiveness of those who
do manage money. What two questions help evaluate the competence
and integrity of those who "sell" their services
as financial planning and investment specialists? 1.
How do I identify the integrity and expertise of a financial
planner? 2.What should I expect from a
competent financial advisor?
So, as is our custom, when challenged to offer advice
in areas outside our "integrity-centered
leadership" arena, we solicit input from
professionals. With satisfactory answers to these 12
questions you should be able to identify, qualify
and even hire (or retain) an integrity-centered
and qualified investment advisor:
Qualifying a financial planner:* http://www.brachercenter.com/article_planner.html
- What
experience do you have?
- What
are your qualifications?
- What
services do you offer?
- What
is your approach to financial planning?
- Will
you be the only person working directly with me?
- How
will I pay for your services?
- How
much do you typically charge?
- Could
anyone besides me benefit from your recommendations?
- Have
you ever been publicly disciplined for any unlawful or
unethical actions in your career?
- May
I have it in writing: agreement, references and track
record?
- Do
I like and trust the individual who wants to serve as
my financial planner?
- Will
the planner score well against the Bracher Center's
Eight Attributes©?
According to Kenneth B. Petersen, of Petersen & Ramistella,
Inc. of Monterey, California, this is what a competent
investment manager does.
Competent investment managers:
- Match your objectives, goals and level of risk tolerance
with an appropriate investment plan and then keep you
on course.
- Design a portfolio that is appropriately allocated
between multiple asset classes and continually monitor
the investments and, at least once a quarter, review
the allocation and suggest changes when necessary. Changes
could be prompted by a need to rebalance because the
allocation is out of whack or because of a change in
your investment goals or risk tolerance.
- Manage your expectations. It's easy to get caught
up in current market trends and react irrationally. The
people who do this end up buying high and selling low.
They also will end up investing in "popular" investments - those
that have recently performed very well - without
giving much thought to what makes sense. Your investment
manager's job is to keep you focused on what makes
sense for you and deflect the "investment noise" that
you hear every day.
- Reinforce the hard fact that we never know ahead of
time which investment and asset class will perform the
best. Because we only know after the fact, we maintain
a diversified portfolio to mitigate the risks of being
out of a well-performing asset class and of being in
an under-performing one.
Predicting Leadership Performance: due diligence
Experienced investors, board members and operating executives
routinely conduct due diligence regarding finances, legal
issues, intellectual property rights, product potential,
market size, and scalability. Sometimes, perhaps too often,
the human equation is left to positive memories, previous
accomplishments and personal relationships. Certainly these
factors are important. However, with increasing demands
on performance within growing governance constraints, more
stringent evaluations could reduce hiring risks. So, we
offer an alternative "predictive" approach
for capital investors and boards of directors.
Investment Integrity. There are five "moments
of truth" to be faced and six
critical questions that must be answered when
investing in leadership: http://www.brachercenter.com/services01.html Investors
must know -- through due diligence -- the behavior and
the potential of senior members of leadership teams.
Capitalization opportunities require accurate information
about leadership capacity. Our leadership capacity "due
diligence" pinpoints the expertise and potential
of senior leaders. With our efficiency in determining
the preparedness of those leaders in whom you may be
investing, we reduce your expenditure of time, which
is money. In the process, we clarify needs that complement
the counsel you routinely provide. We enhance your effectiveness
as investors. A building block for this work is our Portrait
Process ©.
The Portrait Process© provides
a "mirror" offering increased self-awareness
and represents the greatest single opportunity to leverage
interpersonal integrity and effectiveness. Objective behavior
information obtained through an in-depth effectiveness
study helps leaders recognize their strengths and vulnerabilities.
The Portrait © is
more than a snapshot. The interpretation and application
of the data capture the capacity and the potential of the
individual. Our Portrait Process © answers six key
questions by assessing, presenting and validating, with
precision, the nature of an individual's potential
for effectiveness. Our measurements address:
- problem-solving
(strengths and vulnerabilities)
- operational
preferences (prioritizing, details, interpersonal ease
and creativity)
- internal
motivations (consistencies and conflicts)
- external
behaviors (tendencies and habits - constructive
or counter-productive)
- leadership-management
(task versus people and security versus self-actualization)
- decision-making
(options desired and time-frames needed)
April Broadcast: Integration
for Productivity http://www.brachercenter.com/article_integration.html and
Global
Integrity and Multicultural Organizational
Integrity http://www.brachercenter.com/services05.html.
Jim
