Topic: How To Invest

What is Pat’s commentary for the week of September 04, 2019

Article Excerpt

I’ve often written that conflicts of interest are the greatest risk you face as an investor. This idea seems to make sense to most Inner Circle members, even if they never thought of it that way before. But when I mention it to experienced investment professionals, most react in one of three ways: A blank look, as if I’ve referred to something that they know nothing about, or a sensitive issue they don’t want to talk about; An aggrieved or defensive look, as if I’ve raised a sensitive issue and they expect me to follow up with criticism of something they’ve done; A big smile, as if they know of an outrageous conflict of interest and are eager to share. Recently I got response #3—a big smile—from a fellow portfolio manager. He told me about a new client who had previously been investing through a discretionary portfolio-management arrangement with a broker. Previously this client owned a portfolio of mutual funds with…