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Featured Advisor



Srbo Radisavljevic
Managing Principal/Investment Advisor

Edge Portfolio Management

City:Northbrook

State: IL



BIOGRAPHY:
At Edge, a low client to advisor ratio allows for personal and customized service for each individual.  Our goal is to work as a team for each client to provide not only portfolio management but wealth coordination and financial planning.  We make every effort to have frequent communication with our clients and to provide timely response to calls and emails.  I also enjoy spending time with my wife and three kids, following Chicago sports, enjoying ethnic cooking, and serving as a school board member for Norridge School District 80.

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The Wealthy Investor and A Fiduciary Relationshp

Spectrem's new report examines the belief investors have in the fiduciary status of their advisors.

| BY Kent McDill

The concept of “fiduciary relationship’’ is not all that complicated. But the reality is anything but simple.

In its basic form, a fiduciary relationship states that a financial advisor acts always in the best interest of the client. Most investors believe they have a fiduciary relationship with their advisor, even though most financial advisors are not required by law or regulation to act as a fiduciary for their clients.

In Spectrem’s newest research report - Advisor Relationships and Changing Advisor Requirements – the disconnect between investors and advisors in regards to a fiduciary relationship is examined. Specifically, the report shows just how widespread is the belief that the investor-advisor relationship includes a fiduciary duty, which it may not.

Spectrem’s quarterly reports look at investors in three different wealth segments, and the wealthiest is the Ultra High Net Worth investor, with a net worth between $5 million and $25 million. Among UHNW investors, 89 percent say they know what a fiduciary relationship is, and 80 percent say their financial advisor is a fiduciary.

Investment advisors who are subject to the Investment Advisors Act of 1940 must place his interests below that of his client. But a majority of individuals who identify themselves as financial advisors are not subject to the Investment Advisors Act, although they may still act as a fiduciary on their own accord.

The Securities and Exchange Commission is considering a change to its current regulations that would legally tie the word “advisor’’ to the word “fiduciary”. That was a suggestion included in the Dowd-Frank Act of 2010, but Congress left it to the SEC to decide whether to implement it.

UHNW investors have a varied opinion as to what constitutes a fiduciary relationship. Eighty-three percent of UHNW investors believe a fiduciary relationship is a legal one as well, while 67 percent said it means the advisor is looking out for the client’s best interest.

Forty-nine percent believe a fiduciary relationship is based on confidence, trust and good faith, while 24 percent said it a relationship of extreme loyalty.

Only 82 percent of advisor-dependent UHNW investors say they know what a fiduciary relationship is, which is potentially unfortunate for the investor, since they are dependent upon the advisor for all investment decisions. On the other hand, 92 percent of event-driven investors, who only use advisors when necessary, say they understand the meaning of a fiduciary relationship.

 

 



About the Author


Kent McDill

kmcdill@spectrem.com

Kent McDill is a staff writer for Millionaire Corner. McDill spent 30 years as a sports writer, working for United Press International and the Daily Herald of Arlington Heights, Ill. From 1988-1999, he covered the Chicago Bulls for the Daily Herald, traveling with them every day through the nine-month season. He also covered the Bulls for UPI from 1985-88, and currently covers the team for www.nba.com. He has written two books on the Bulls, including the new title “100 Things Bulls Fans Should Know And Do Before They Die’, published by Triumph Books. In August 2013, his new book “100 Things Bears Fans Should Know And Do Before They Die” gets published.

In 2008, he resigned from the Herald and became a freelance writer. The Herald hired him to write business features and speeches for the Daily Herald Business Conferences and Awards presentations.

McDill also writes a monthly parenting column for the Herald’s Suburban Parent magazine.

McDill is the father of four children, and an active fan of soccer, Jimmy  Buffett and all things Disney.