The Value of Portfolio Transparency

In breaking news this week, Stanford Financial, which has a significant local presence here in Houston, has been accused of engaging in fraudulent investment activity. The initial allegations appear related to CD’s or Certificates of Deposit, issued by Stanford International Bank located in Antigua, a small island in the Carribean. Evidently, these CDs offerred an unusually high interest rate and have paid above-market rates of return for some time, raising the suspicions of regulators. In addition, concerns have been raised about investment performance claims used in marketing a mutual fund wrap account. As in the recent Bernard Madoff scandal, which continues to unfold, we are reminded that when things seem too good to be true, they probably are.

This news will, no doubt, add to general investor uncertainty and possibly outright suspicion about how advisors handle their clients’ accounts. We want to take this additional opportunity to highlight our accounts’ transparency and our due diligence process and to assure our friends and clients that we are doing the right things in the right ways. Our investment process is disciplined and rigorous and we spend a great deal of time and effort evaluating our selected managers before we commit our clients’ capital to their strategies. There is much more to making these decisions than relying solely on purported track records or investment return claims.

Our role as an investment advisor is to act as a financial steward for our clients and we take this responsibility very seriously. If you have any questions or would like to learn more about the safety of your accounts or our due diligence process, please cal

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