Due Diligence

Due diligence. We hear this term all the time in our industry and I’m sure other industries use it as well. Here in our headquarters that houses our two firms, Symmetry Partners and Apella Capital, we host due diligence visits frequently. Visitors are independent financial advisors learning about our offering or our own advisors bringing their clients and prospective clients to learn more about the firm(s). We schedule a half or full day of presentations and meetings with department heads and key personnel. The goal is to demonstrate our capabilities in investment management, financial planning, and associated services we offer.

Why are these various players taking time out of their busy lives to see us? Quite simply, a significant portion of their future security depends on them making a smart decision based on this meeting. Consider the amount of money they are investing plus the future savings to be added to these accounts multiplied by years invested and it equals a potentially huge sum by any measure. This is one of the biggest decisions any investor will ever make over their lifetime.

So what percentage of the 2500 or so advisors with whom we do business actually visit us? Maybe 5% per year. And many are repeat visitors. At Apella, our own advisors make sure to have clients in the office as often as possible for three reasons:

1.       The opportunity to continue educating clients;

2.       To update their plan and revisit their allocation;

3.       To interact with the staff that looks after their money daily.

Investors and their advisors have an obligation to understand at some level how their capital is being invested; certainly advisors have a greater responsibility here. Spending time with the professionals who act as stewards of your money should give you some confidence you have made a good decision. On the other hand, if they can’t give you the time to ask questions and educate you in ways that help you understand more fully how your money is managed, you should probably move on. It is after all, your money.

This constitutes ongoing due diligence, and far too few investors and advisors alike seize this opportunity. Time spent with a good advisor and the money manager they recommend should be table stakes, not a special favor or a sales opportunity.