The Small Investor Protection Association (SIPA) put out a report titled Web of Deception just about the same time that we were putting the finishing touches on our Our Voluntary Code of Conduct for the Stewardship of Your Wealth
Which you can find on our website on the home page:
While we are only part of the 3% of financial advice givers who absolutely must put their client interests ahead of their own (see Paul's blog on Fiduciary Duty (http://highrockcapital.ca/pauls-blog/standard-of-care-vs-fiduciary-dutya-significant-difference) because we are required to do so by law, we are not required to have an Independent Review Committee.
However we do so to provide our clients with the comfort that we are doing what we say we will do.
Commit to having an Independent Review Committee (IRC) for complete transparency
In fact, we are the only portfolio management company in Canada (to the best of our knowledge) who manages client money on a Separately Managed Account (SMA) platform who does this.
Each quarter, with their portfolio summary and client note, our clients receive a letter from Wychcrest Compliance Services:
In a nutshell, it informs clients that our policies and procedures are in order, that our Ontario Securities Commission (OSC) registration is in good standing (and providing our fiduciary responsibilities) and that there are no outstanding complaints against us.
More importantly, it states that:
We have also reviewed the accounts of the principals of High Rock Capital and can confirm that their personal investment accounts largely reflect the same securities as your accounts.
In essence, it is a follow-up to our claim that we invest in the exact same models (and assets that are in those models) as our clients.
In other words, we are "eating our own cooking".
Even if your advisor tells you that her / his portfolio is 60% equities and 40% fixed income, will they tell you exactly what securities they own?
Reminds me of that scene from the Wizard of Oz when the truth is revealed:
"pay no attention to that man behind the curtain"
What an absolutely bang-on parallel to what SIPA has been reporting on and as a former investment advisor and branch manager, I have seen it all, first hand.
There is an alternative to the old style investing norms and we (at High Rock) are leading the way in building and maintaining trust with our clients through complete transparency.
Want to discuss this further and in more detail?
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Scott Tomenson,CIM Managing Partner, Chief Investment Strategist