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The Leading Financial Experts' Strategies for Success

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					    The Leading Financial Experts’ Strategies for Success
                              -
                  ALTERNATIVE REALITIES
                   The Best Mix of Hedge Funds and
                        Private Equity for You
                    THE GOLDEN FLEECE
                    How to Avoid Charity Scandals
OCTOBER 2005
                                                       SOUND
                                                COUNSEL?
    Financial advisors and brokers lock horns over who can and should advise private investors.
When is a financial advisor not really an advisor?                 favor of the client, some investors may want to retain the
   When he or she is a broker. At least, that is the argument      freedom to pursue legal action.
being made by the Financial Planning Association, a Denver-
based organization now embroiled in a heated argument              COMPETING CREDENTIALS
over just what qualifies an individual to be described as a        The Financial Planning Association has sued the SEC, chal-
financial advisor. The issue revolves around whether invest-       lenging the April 12 ruling as not being in the best interests
ment counselors employed by brokerage firms such as Mer-           of investors. Barnash argues that his goal is simply to press
rill Lynch, Smith Barney and many others that sell financial       the SEC to establish a set of uniform standards that would
products fit that designation.                                     apply to anyone offering financial advice, whether as an
   In April, the SEC ruled that these counselors do not have       independent planner or through a giant brokerage. “There
to register under the Investment Advisors Act as financial         are many, many ethical and qualified sales people who pro-
advisors, but can still offer financial advice and planning        vide the same advice as their advisor counterparts,” Barnash
service to their clients. That, independent advisors argue,        says. “We are concerned about the ones whose divided loy-
may confuse investors about the nature of the advice they          alties can lead them astray, yet act as trusted advisors under
are receiving, particularly in light of advertising by the big     the rule.”
Wall Street firms that describes their brokers as part of a           Not surprisingly, Wall Street sees the lawsuit in a different
global network of financial advisors.                              light. “The argument is a red herring—an attempt by finan-
   Most established brokers at reputable firms with large client   cial planners to limit competition by restricting choice,” says
bases now derive the bulk of their income from management          Mark Herr, a spokesman for Merrill Lynch. “Our advisors
fees, not commissions.This means there is less risk that a bro-    operate under one of the most comprehensive regulatory
ker will put a client into unsuitable or underperforming           schemes that exists.” Indeed many brokers can have multiple
products that offer higher commission fees, or conduct a           registrations and may also be registered as an investment advi-
flurry of ill-judged trades simply to generate commissions.        sor with the SEC—or may have other registrations with state
   Yet while the advent of fee-based investment advisory           entities that require that level of fiduciary duty to their clients.
services on Wall Street may have blurred the line between             The lawsuit—and the issue—are likely to drag on for
broker and advisor, there remains some differences in law          months, possibly years. In the meantime, how can investors
and in practice between the two. Under the law, broker-            make sure they are getting the best possible advice with the
dealers have to ensure that their advice and transactions are      least potential for conflict of interest? Advisors themselves—
suitable for their clients. However, they are not fiduciaries.     both brokers and independent planners—urge potential
This is an important distinction, because a fiduciary has a        clients to ask about a planner’s credentials and registrations.
responsibility that stretches beyond that of suitability. Tech-    Check up on the planner’s record with regulatory agencies.
nically, a fiduciary must place the client’s interests above all   “Ask if your advisor’s dealings with you will be as if he were
other considerations, reflected in the fact that fiduciaries       a fiduciary,” Barnash suggests. One credential to look for is
often have the legal authority and duty to make those finan-       whether a broker or advisor carries the CFP, or certified
cial decisions on behalf of their clients.                         financial planner, designation. “That’s no guarantee, but it
   “Not every investment advisor is an angel, but it shows that    shows that there is a minimum of education, testing, contin-
there is a commitment to a higher standard,” says Jim Bar-         uing education and a stated adherence to ethical standards
nash, president of the Financial Planning Association and a        that exist,” Barnash says.
managing director of Lincoln Financial Advisors in Chicago.           All parties to the dispute agree that any time an investor
   Another distinction is one that clients may discover only       seeks out financial advice, there is a degree of caveat emptor
when they have a problem with their portfolio and want to          involved. “It would be great to continue to educate clients
complain. If they are working with a registered investment         about how to make a wise choice of advisor,” Herr says. Bar-
advisor, they can sue that individual in the courts. If their      nash agrees, noting that some important issues lie beyond the
advisor is a broker, however, their only recourse is to take       scope of the debate over broker versus advisor. “You need to
the matter to arbitration at the National Association of           make sure that you are selecting an advisor who understands
Securities Dealers. While a majority of cases that end up          you and represents people like you well,” Barnash says.“That’s
being ruled on by an arbitration panel are adjudicated in          perhaps the most important piece of the puzzle.” —SM


                                                                                                                       October 2005 • Worth
                                METHODOLOGY:
                              “SECRETS” REVEALED
                                           Dedication, vision and experience
                                          are requisite to be counted among
                                                  the best of the best.




E                   arlier this year,
                   Worth learned that an
                enter pr ising huckster
             was offering a seminar in
which, for a modest fee, he would reveal
secrets to being named to Worth’s Top 100
Wealth Advisors list. Privately, our editorial
staff enjoyed a chuckle at a) the audacious
opportunism of the seminar’s host, and b) the
notion that there is some secret way of gaming the sys-
                                                                                            22-year-olds with economics degrees
                                                                                            need apply.
                                                                                              Most importantly, though, we look
                                                                                           for candidates who can intelligently dis-
                                                                                          cuss the current investment climate, the
                                                                                         markets, returns achieved for their clients
                                                                                     and their strategies for success. Given that
                                                                                 the major markets these days are only offering
                                                                             lateral moves, advisors must also be able to discuss
                                                                        the alternative investment vehicles they are recom-
tem to guarantee inclusion on the list.                                 mending to their clients. Those advisors who do not
   For the record, there are no secret ways to make                     recommend alternative investments—and there were
our list. To the contrary, Worth’s editorial staff has                      many respondents in this group—do not make the
made every effort to create a selection                                              list. When the seas are calm, the conscien-
process that is objective, fair and, above                                              tious sailor does not wait for the wind; he
all else, transparent.                                                                  looks for a paddle.
   Each year we ask our readers to nomi-                                                   In responding to our questions, it is not
nate those wealth advisors who have gone                                           enough to simply offer up marketing slogans
above and beyond the call of duty in meeting their clients’       or the text from recent brochures. Respondents must pro-
needs—those who are truly exceptional. We also extend this        vide answers that are detailed and insightful, but that are also
request to private banks, wealth management and investment        accessible. Here’s why: Above all else, wealth advisors must
firms and to other industry associations.                         be able to communicate with their clients.Through counsel
   Nominated advisors complete a detailed questionnaire in        and education, they must guide their clients through both
which they provide their educational credentials, compensa-       the fat and lean years. We assume, with good reason, that
tion structure, client retention rate and other information on    those wealth advisors who take the time to thoroughly,
their professional background. They also are required to          expertly and clearly answer our questions will answer their
answer all the questions that investors should ask of potential   clients’ questions in the same way.
wealth advisors: What returns have you achieved for your             It is this basic assumption that informs our selection
other clients, and how? Have you ever been sued by disgrun-       methodology from beginning to end. We ask questions, we
tled clients? What alternative investments are you recom-         perform background checks and, finally, we invite the clients
mending? And so on.                                               of various candidates to tell us why their advisor should or
   Reviewing the responses of hundreds of highly qualified        should not be on the list. Our goal in this process is to iden-
and dedicated wealth advisors is no small task. In this often     tify those who possess the superior qualities that define a
painstaking process, the editorial staff of Worth gives weight    top wealth advisor: vigilance, expertise and the ability to
to the qualifications and responses that we believe are telling   communicate honestly and frankly with clients.
of an advisor’s capabilities. For instance, advanced degrees in      These qualities are certainly no secret. In fact, they are
                                                                                                                                       MALCOLM TARLOFSKY




business, finance and law, as well as financial certifications,   found in each of those professionals named in Worth’s 100
evidence a true commitment to achievement and to the              Top Wealth Advisors list for 2005.
profession. Furthermore, professional longevity counts—no            —Douglas McWhirter


Worth • October 2005
                     Wealth Advisors                                                                                                 LARGEST        MEDIAN          MINIMUM
                                                                                                                                     CLIENT         CLIENT          ASSETS FOR
                                              FIRM, CITY                                              PHONE          FIRM ASSETS     NET WORTH      NET WORTH       NEW CLIENTS

Alabama
Robert Studin, JD, CPA, CFP, CLU, ChFC, PFS   Lincoln Financial Advisors/                             205.803.3333   $100 billion    $60 million    $8 million      No minimum
                                              Lincoln Financial Group, Birmingham

Arizona
Laurie Bagley, CFA                            Strategic Wealth Advisors, Scottsdale                   480.998.1798   $100 million    $60 million    $5 million      $1 million
Thomas Connelly, CFA, CFP                     Versant Capital Management, Phoenix                     602.235.2663   $130 million    $40 million    $5.5 million    $2 million

Arkansas
Cynthia L. Conger, MBA, CPA, PFS, CFP         Cynthia Conger, Little Rock                             501.374.1174   $25 million     $10 million    $1.3 million    No minimum

California
James Berliner, JD                            Westmount Asset Mgmt., Los Angeles                      800.817.0602   $580 million    $110 million   $3.75million    $1 million
Norman Boone, MBA, CFP                        Mosaic Financial Partners, San Francisco                415.788.1952   $225 million    $25 million    $8 million      $1 million
Diane Bourdo, MBA, CFP                        The Humphreys Group, San Francisco                      415.928.0401   $104 million    $21 million    $7 million      $2 million
Joel Framson, CPA, PFS, CFP                   Silver Oak Wealth Advisors, Los Angeles                 310.443.0220   $108 million    $20 million    $5.4 million    $2 million
Jim Freeman, CFP                              Financial Alternatives, La Jolla                        858.459.8289   $49 million     $13 million    $2.2 million    $1 million
Meloni Hallock, MBA, CPA, PFS, CIMA           Acacia Wealth Advisors, Los Angeles                     310.246.0570   $600 million    $1 billion     $75 million     $10 million
Neil Hokanson, CFP                            Hokanson Capital Mgmt., Solana Beach                    858.755.8899   $245 million    $43 million    $2.5 million    $1 million
David Hou, MBA                                Merrill Lynch Private Banking & Invest.,Los Angeles     310.407.4829   $1.4 trillion   $1.5 billion   $32.5 million $10 million
Michael Johnston, MBA                         Smith Barney, Irvine                                    949.955.7557   $1.5 trillion   $117 million   $12 million     $3 million
Debbie Jorgensen, CFP                         Merrill Lynch, San Francisco                            415.955.3782   $1.6 trillion   $105 million   $15 million     $5 million
S. Timothy Kochis, MBA, JD, CFP               Kochis Fitz, San Francisco                              415.394.6670   $1.3 billion    $325 million   $15 million     $5 million
Michael Ladge, MBA                            UBS Financial Services, Los Angeles                     310.772.7070   $525 billion    $100 million   $7 million      No minimum
Jeff J. Saccacio, CPA, PFS, ChFC              Citigroup Private Bank, Costa Mesa                      714.428.6586   $221 billion    $310 million   $35 million     $5 million
Spencer Sherman, MBA                          Abacus Wealth Partners, Sebastopol                      707.829.6190   $370 million    $40 million    $5 million      $5 million
Christopher Wheaton, CPA, CFP                 Litman/Gregory Asset Mgmt., Larkspur                    415.461.8999   $4.9 billion    $1.4 billion   $7.5 million    $3 million

Colorado
Judith Shine, CFP                             Shine Investment Advisory Serv., Lone Tree              303.740.8600   $350 million    $57 million    $4.5 million    $1 million

Connecticut
John F. (Jeff) Erdmann III, CFM               Merrill Lynch Private Banking & Invest., Greenwich      203.861.5902   $1.4 trillion   $1 billion     $20 million     $3 million

Delaware
Benjamin Ledyard, JD                          Wilmington Trust, Wilmington                            302.651.8901   $36.5 billion   $2 billion     $40 million     $5 million
Ralph C. Wileczek, CPA, CFP, CTFA             Wilmington Trust, Wilmington                            302.651.1985   $36.5 billion   $80 million    $7 million      $3 million

Florida
Louis Chiavacci, MBA, CFM                     Merrill Lynch Private Banking & Invest., Coral Gables   305.774.0500   $1.4 trillion   $3 billion     $70 million     $10 million
Harold Evensky, CFP                           Evensky & Katz, Coral Gables                            305.448.8882   $500 million    $30 million    $7.5 million    No minimum
Brent Fykes, CFA, CFP                         Asset Mgmt. Advisors, Palm Beach Gardens                561.746.8444   $6.8 billion    $500 million   $40 million     $10 million
Robert Isbitts                                Emerald Asset Advisors, Weston                          954.385.9624   $205 million    $75 million    $3.75 million   $1 million
Linda Lubitz, CFP                             The Lubitz Financial Group, Miami                       305.670.4440   $130 million    $28 million    $4.5 million    $1 million
Marc Singer, MBA, CFP                         Singer Xenos Wealth Mgmt., Coral Gables                 305.443.0060   $600 million    $130 million   $4 million      $1 million

Georgia
Anthony Guinta, CPA, CFP, PFS                 Homrich & Berg, Atlanta                                 404.264.1400   $1 billion      $1 billion     $6 million      $2 million
Ron Hughes Jr., MBA, CFM                      Merrill Lynch Private Banking & Invest., Atlanta        404.231.2558   $1.4 trillion   $250 million   $20 million     $10 million

Illinois
Brent Brodeski, MBA, CPA, CFP, CFA            Savant Capital Management, Rockford                     815.227.0300   $759 million    $43 million    $1.8 million    $1 million
Steven B. Weinstein, JD, MBA, CFP, CFA        Altair Advisers, Chicago                                312.429.3013   $1.7 billion    $1 billion     $10 million     $5 million

Iowa
Phil M. Kruzan Sr., CFP                       Foster Group (Zero Alpha), West Des Moines              515.226.9000   $532 million    $60 million    $4 million      $1 million




                                                                                                                                                             October 2005 • Worth
                                                                                                                                                MICHAEL J. LADGE


                                         As a Vice President of Investments with the Corporate Executive Services Group, Michael
                                         Ladge provides top-tier financial strategies to help his clients with their highly individual
                                         goals. By employing an extensive wealth management approach through a consultative
                                         process, he implements a customized investment plan designed to accumulate, preserve and
                                         transfer wealth. Mr. Ladge serves a select client base from a broad spectrum of industries,
                                         and they include numerous corporate executives, entrepreneurs, and professional athletes.

                                         Prior to UBS, he worked with Credit Suisse First Boston which had acquired Donaldson,
                                         Lufkin & Jenrette. Prior to that, after earning his MBA from the Anderson School at UCLA
                                         and a BS from Syracuse University with a double major in finance and statistics, Mr. Ladge
                                         initiated his career as an investment advisor with Morgan Stanley.

                                         Originally from Boston, Mr. Ladge resides in Bel Air, California with his wife Megumi and
                                         daughter Alexis. In addition, Mike works extensively with Jim Brown's Amer-I-Can
                                         Foundation, helping reshape the lives and futures of inner-city children and adolescents.




                                                                                                                                                                                              Wealth
                                                                                                                                                                                              Management
                                                                                                 2029 Century Park East • Suite 3000
                                                                                                       Los Angeles, CA 90067
                                                                                                           (310) 772-7070
                                                                                                       michael.ladge@ubs.com


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