How to Choose An Investment
or Wealth Preservation Strategy and Advisor

From Ronald Holland's upcoming fourth book, Restoring Our American Legacy. Get ready for a new 21st century reappraisal of how Americans should look at domestic and foreign investing, real estate investments, wealth preservation, American history and our global foreign policy. He asks if it is time to consider an improved political paradigm utilizing successful Swiss style direct democracy and the confederation model along with our existing political structure to return our nation back to the limited Republic form of government established by our Founding Fathers. In this new century of instant communications, 24 hour news, the War on Terror, exploding government and private debt, a falling dollar and America's declining status around the world it is time for a change. Americans must retake control over our government policies at home and abroad by restraining politicians, the bureaucracy and special interests to restore the control of productive American citizens back over our own government. Our wealth, prosperity and ultimate liberty depend on Restoring Our American Legacy before it is too late!

Talking Points: What should you look for when considering an investment or asset protection strategy or in your search for an advisor or advisory group? Everything is always great going into an investment or strategy but it's the end result that counts. Find out what could go wrong and research the possible downside as no one will do this for you.  How to get started today with thoughtful, well researched action rather than putting off defending your wealth until it is too late.

A stockbroker is someone who takes all your money and invests it until it’s all gone.
                                                                                   --Woody Allen

We all know the internet is driving down the cost of investment advice, financial transactions and asset protection fees around the world. It is making insurance products and mutual funds with high front-end loads and full-commission stockbrokers obsolete. The same trend goes for asset protection structures and vehicles. High upfront costs and expensive structures and products are also losing out in the today's competitive world of wealth preservation and asset protection.

I believe that knowledgeable investors will in the future either use low commission (e-trade type) brokers or fee based investment advisors. Now this doesn’t mean the internet works for all financial products and services. For example, remember the internet based e-trade accounts during the last equity bull market when  every financial news channel was filled with continuous advertisements pushing low commission e-trading accounts. What happened?  You know the rest of the story as the low commissions had an unfortunate corollary: excessive trading and increased investor losses.

What the investment firms never told you was -  day trading didn’t even work for most investors during the bull market as a majority even then lost money. 

According to Worth magazine: "A recent study of retail day traders by the North American Security Administrators Association found that only 11.5% of them do it profitably and want an acceptably low chance of ruin Seventy percent of day traders are so bad that they are likely not just to lose money but to lose all of their money"5 [emphasis added].

Fee-based investment advisors avoid a conflict of interest because they don't get paid commissions for merely churning your portfolio around. They are rather paid a flat fee based on the percentage of assets under management and sometimes a bonus if the portfolio grows in value as a result of the their investment management.

What should you look for in a fee-based asset protection or investment advisor? Here are some recommendations based on my more than 30 years of experience in the financial, retirement and investment business:

Choose an advisor or financial provider with substantial experience and money under management.
Find out in writing the amount of funds currently under management (not investments previously sold by commission) by the underlying financial organization or provider when reviewing asset protection products such annuities, life insurance or other managed offshore account structures. Make sure the bank, insurance company or investment manager has at least five years in the money management business and a minimum of US$100 million under management.

Expect to provide a detailed information questionnaire to the advisor.
The advisor you are considering should explore not just your current financial situation but, more importantly, your unique investment goals and risk concerns.  Here are a few questions you should expect: Are you married and is the marriage stable?  What about business relationships and partnerships, any potential problems that might arise in this area?  They should also want to discuss the nature of your business, insurance coverage and the asset protection needs others in a similar line of work might face.

Expect questions like why you think you need asset protection and what really concerns you most? Is it the threat of terrorism against our financial markets, another market or financial crisis brought on by the usual government and financial establishment excesses or do political, government or legal risks most concern you? How can a secure wealth preservation program bring peace of mind and personal security to you as a potential client?  These are just a few of the many questions they should be asking and more important, also listening to your answers.

Advisors should also ask for detailed information about your financial situation.
Be prepared to list and answer questions about existing investments, your net worth, annual income and investment needs. An advisor that doesn't request and review this data is not someone you should want to manage your portfolio or protect your assets.  

Weigh the pros and cons of onshore verses offshore advisors.
Offshore investment advisors generally have a wider range of potential investments available. They will also provide a degree of confidentiality and privacy not available from SEC registered or U.S. based advisors. But an offshore advisor will sometimes charge higher fees and you may not receive the level of service, feedback and convenience as with a domestic advisor. Also remember that many offshore-managed investments are reportable as a foreign financial account. Some experts believe acknowledging such an account can be a "red flag" on your tax return.

For asset protection programs and advisors, I urge those of you seriously interested in defending your wealth to really consider the offshore alternatives. I don’t believe there is any way to achieve maximum asset protection inside your own country, especially, if you live in the United States. In the U.S., attorney/client privilege is weakening, the legal system is designed to help others steal your wealth and the government is certainly part of the problem rather than the solution. 

Talk to your close friends and associates.
Ask your friends in similar professional or net worth circumstances what they have done to protect and defend their wealth and see if they will tell you about good or bad experiences. If they have had good service, investment performance and especially if their structure has survived an asset attack, see who they recommend and then check them out.

Important!  For maximum asset protection never discuss your personal situation or asset protection structure with a friend or business associate. Remember a friend or business associate today could be facing you in court tomorrow. So ask questions of others if you like but be smart and don’t answer any questions yourself. 

Check out asset protection experts and portfolio managers recommended by your favorite newsletter editors.
One caveat: you need to determine if this is an objective recommendation or if they are a referral agent to a specific advisor. I recommend consulting with financial professionals that use a variety of advisors - not just one or two. You're likely to receive more objective advice.

Choose an asset protection program and advisor that shares your understanding and personal philosophy about defending your wealth. 
If all the program does is offer protection from lawsuits and your concern is political risk, unwarranted government asset seizures, financial crisis or terrorism, then find an expert and a structure or a strategy specifically designed to protect your wealth from what you perceive as the ultimate threats. I don’t buy the concept that any asset protection program is better than none at all. Either build or utilize what is right for you or don’t waste your time, money and effort on the process.

Find an investment advisor or consider strategies for your program with a compatible investment philosophy to your own. 
Choose an advisor you feel comfortable with philosophically. For example, if you believe in Austrian Economics or "hard money" investing, consider an advisor that shares your concerns and that knows how to apply these economic principles in investing. The same principle applies if your interest lies specifically in technology stocks, global investing or if you just want a balanced income or growth portfolio.

Avoid sales pressure.
If you are paying for investment or legal advice, or asset protection consulting why should you be subject to heavy duty sales pressure? The answer is, you shouldn't. If the advisor doesn't spend most of your time together asking you questions and listening to your answers, he may not be doing his job. Beware of an advisor who brags about performance and doesn't explain the investment risks. Also watch out for any back end load or penalty charges if you change advisors. Most advisors charge a percentage of assets under management with little or no termination fees. If the product or strategy seems to good to be true, then it probably is.

Use major financial providers in quality jurisdictions.
Only use financial providers such as banks, trust companies, insurance companies and investment advisors who have a proven track record and that are located in highly regulated jurisdictions. Beware the many scam artists in the offshore and onshore world of investing, insurance, law and asset protection.

The Question You Never Hear: What Could Go Wrong?

"Fish see the bait, but not the hook; men see the profit, but not the peril."
                                                                        --Chinese Proverb

Forget all the investment performance promises, the overused graphs and claims of past performance before you decide to invest with a new bank, advisor or financial institution.  None of this really matters as it is all in the past.  Also, often the very worst investment decision you can make is to choose an investment strategy, fund or manager that has led the pack during the pervious year. Although far too many investors believe the only way for an investment to go down is for them to buy it, usually this is a result of chasing last years top performers rather than any bad luck or investment curse.

So what can go wrong with a new legal and transparent asset protection strategy or product?  Well, the key word here is legal.  We all know (or should) what can go wrong with an illegal non-reported offshore account or structure but lets say you want a fresh start and fully intend to follow all the reporting, tax and disclosure rules now oozing out of the Washington regulators. So what could go wrong?

Washington might change the rules or regulations
 The key word here is change.  We must assume that new legislation will change the rules as this has happened many times in the past.  Sometimes you are grandfathered but usually the result is more taxes, less deductions and American citizens end up with far reduced financial privacy and financial freedoms. Those with structures or investments that assume the rules will always remain the same will find that changes increase their legal costs and reduce the perceived benefits promised in the first place.  What is important for investors is to choose structures and products with little or no front end fees, minimal ongoing legal charges so when they have to be updated, this can be done quickly, efficiently and at a minimum of cost.

This is another reason why this book is published online. We will provide regular e-mail notifications of updates in text, examples and strategies in order to alert readers of new threats to their wealth and provide cutting edge solutions.

Unexpected lawsuit.
It may never happen to you but my philosophy is that it's better to be safe than sorry.  You may feel that all this effort to properly secure your wealth to be a waste of time and money but this is a mistake I believe we all could live with.  Many investors will find that taking the effort to build an ironclad wealth preservation program will dramatically drop even the risk of a future lawsuit. 

Remember there is plenty of easy, non-protected money out there for the taking subsequently a secure, offshore asset protection program often encourages the plaintiff and his pack of ambulance chasing attorneys to go after easy prey they can catch rather than engaging in a long chase with an uncertain end. Litigation attorneys aren’t in this for the chase unless a plaintiff is paying by the hour. If they are paid on contingency basis they want a sure winner or they will refuse to take the case.

Bad investment strategy.
Just because a particular investment strategy or portfolio has performed positively in the past doesn’t mean that future performance will be the same.  Remember to utilize an investment strategy and investment advisor that shares your vision for the future.  For example, if you've believed and invested in the U.S. stock market in the past but you share my concern about the terrorist threat to New York City and Wall Street then I wouldn't recommend a major investment in the “Dogs of the Dow Managed Portfolio.”  

So how do you protect your strategy from these worst case scenarios? 

Never place all of your assets in one single, investment strategy or with one advisor.  Always diversify among investments, advisors, currencies, markets and jurisdictions to reduce your risk and portfolio volatility while increasing your chances for portfolio appreciation. Simply stay one step ahead of those after your wealth and keep in mind that certain aspects of your portfolio or strategy may have to be amended or updated in the future. This has always been the case so rather than being a negative this is just part of the battle you must deal with in defending your wealth.

You may or may not be faced with a lawsuit or unwarranted asset seizure just as another terrorist attack may or may not happen, but whatever happens in the future and whatever your specific concerns are a secure, well-diversified wealth preservation program will allow you to sleep more comfortably at night.

 

Ronald Holland is editor of this website and a broker/realtor with Wolf's Crossing Realty. For questions, comments or  lot listings in Wolf Laurel, please use this E-MAIL INFORMATION REQUEST or call toll-free 800-541-1738 or after hours at 828-689-2148 More of our websites about Asheville, Wolf Laurel & our high mountain area. Wolf Top News - News. links and headlines about the Preserve and Wolf Laurel Resort. Asheville's Big Bald Highlands -  Provides info on all mountain resorts in Wolf Laurel area. Ski Dixie -  Travel, resort and real estate news for Southern skiers.  Move To Asheville - Info on why Asheville is a major tourist destination & 2nd home market. Golf Asheville - Asheville is truly a golfing paradise with 19 courses around the city. Ski Asheville - Learn more about the 8 ski resorts within 90 miles of Asheville. The Mountain High Club - For mountain lovers who want the best in mountain experiences. Asheville High Country - (Under development) with info only on Asheville area mountains. RonaldHolland.com - More about the Holland's & their marketing & business activities. Ray's Weather Station & Forecast at Wolf Laurel - A weather station at our 4,500 ft elevation. Ron's Web Cam  - See the real time weather, views and conditions here.   Please click the graphic at the left to receive a free photo tour DVD featuring highlights of the seasons of Wolf Laurel and the Western NC area provided by Wolf's Crossing Realty & a listing of resale mountain lots at Wolf Laurel where prices begin at under $25,000 per lot.

 

Take the Wolf Grand Tour in 2007! - A fun, relaxed, no pressure alternative to see the broad range of of real estate opportunities, homes and lots in Wolf Laurel, Wolf Ridge Ski Resort, Breakaway Village, the Peaks at Wolf Ridge,  the Haw Ridge Summit airport community and the  Preserve at Wolf Laurel including Buck Town, Steeplechase and The Ridges.. What could be better than a  brief private tour of all the resorts together followed by wine or sparking grape juice and cheese on a mountain top with long-range views that seem to go on forever?  We are only 35 minutes from exciting Asheville, NC recently named by Frommer's, the most respected name in travel writing as one of the top 12 destinations in the world for 2007. Do Your Own Due Diligence! -  No sales pressure, just balanced information as we drive you and your family through the different communities answering your questions on prices, views, winter access, climate and lifestyle as we highlight the unique advantages, differences & amenities of each resort in a fair and balanced manner as we do not represent any particular resort or development. CLICK HERE for more information and to schedule your complimentary private Grand Tour of our resort area.

 

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