“Thought for the Day” #817 – by Stephen R. Elville, J.D., LL.M.

October 5, 2016

For trustees of special needs trusts, there are countless investment professionals to choose from.  However, few are knowledgable about special needs issues or dedicated to special needs families and their unique challenges.  There are so many, in fact, that the choice of an investment adviser can quickly become overwhelming.  The Internet site for the Securities and Exchange Commission (SEC) offers several tips for beginning investors who are seeking to hire an investment professional.  According to the SEC, investors should know exactly what services they are looking for prior to interviewing advisers, and they should find out what services their potential investment adviser provides, how much those services cost, and how and when the adviser gets paid.  These threshold questions are important, but the SEC also recommends asking each potential adviser a battery of specific questions, including questions about their experience, education and employment history, whether the adviser is limited to recommending a certain set of products and whether the adviser is registered with the SEC or with a state licensing agency.  Trustees should also understand the various types of fee structures utilized by investment advisers, including a percentage fee based on the total assets under management, an hourly system, a fixed fee or a commission based on the products sold.