Following is an excerpt from an article by Philip Palaveev, president of Fusion Advisor Network, formerly of Moss Adams, and a regular contributor to Investment Advisor, that will appear in the September 2009 issue.
The natural state of a true investment advisory firm is a privately owned partnership that is fully controlled by the professionals who are actively involved in the delivery of advice to clients. Any other form of ownership–whether that’s a public company or a corporate ownership by a financial institution–creates potential conflicts of interest, exposes the company to undue risk, dilutes the expertise, diverts the focus of the organizational culture away from the client, and ultimately results in a cycle of crisis events that hurt the clients and the advisors every few years.