Barrons, the weekly journal published by Dow Jones since 1921 is widely considered to be a leader in financial journalism. When it published its recent “How To Pick A Financial Advisor” I decided to put Osbon Capital to the test. You can see the questions and answers yourself right here:
Here are the subjects Barron’s recommends you discuss with any financial advisor you might be considering – one you work with now or anyone you might interview in the future. The topics emphasize the ability of an advisor to meet your needs for the long, long term. Osbon Capital responses follow each item. You decide if we’re the kind of advisor that’s right for you.
Barron’s queries, Osbon Capital replies
1) Advisor-to-client ratio. Brad DeHond, a nationally ranked advisor who serves very wealthy investors, keeps his ratio at 30-to-1 to provide enough attention to each client. A “retail” advisor, serving clients with under a few million dollars, should serve no more than 100 clients, he says. You will always talk directly to an Osbon (John or Max) because we believe owner/operators with skin in the game should be deeply familiar with each client, and vice versa. That means a limit of 100 Osbon clients. We’re not there yet.
2) Experience. Intelligent, committed advisors can be any age, but a little seasoning can be very reassuring. If an advisor has been through a few bear markets, she may do a better job of protecting your money when hard times hit. John’s 30 years of investment experience and investing for himself got him to where he is today, and is the primary reason Osbon Capital was established in 2005 for the Osbon family. Max’s (next generation) experience as a math/finance major, Bloomberg salesman covering Goldman, and now Osbon partner provide us with innovation, energy and forward thinking for current and future generations.
3) Compensation. Some advisors are compensated through sales commissions, others through fees based on the amount of assets under management, and others through a combination of the two. Be prepared to ask hard questions about why the advisor’s compensation model is better for you than the alternatives. Osbon Capital is compensated only by a fee for service and has a legal, fiduciary responsibility to always act in the client’s best interest. We are the client’s investment trustee. We firmly believe this structure is the ONLY way to provide long term conflict-free investment management to private individuals. No exceptions.
4) Career stage. Advisors typically spend the first several years of their career building a client base, which may affect the amount of personal attention you’ll receive. You should leave an interview confident that you won’t get lost in the shuffle. Osbon Capital is multi-generational by design: two generations of owner-operators mirrors the long-term investment strategy we strongly advocate. As to the future, John has publicly written that he believes in lifetime employment (like Warren Buffett) and Max, age 26, is just beginning what we expect will be a lifetime career with Osbon Capital. We’re thinking 60 years ahead, just like our clients do.
5) Firm stability. Because advisory firms compete with one another to recruit successful brokers, some advisors make a career of jumping from firm to firm. You may want to avoid advisors who can’t stay put, says DeHond, adding, “Clients hate that kind of instability.” Stability and permanence enhance the client investment experience and investment results. With 100% family ownership, no debt, no outside partners, and multigenerational operations in place we are fully prepared to be your family investment advisor “forever.”
John Osbon – email@example.com