At a recent dinner at a friendís house, I was introduced to a business owner who had just sold his company for $7 million dollars. The newly wealthy gentleman, letís call him ĎDave,í confessed that he had no idea how to get started investing his money. He wanted to know how advisors get paid, along with the differences between the firms and their relationships with their advisors. In other words Dave, like so many other neophyte investors, was in need of a primer on the wealth management industry, its peculiar lingo and how it works.
Our conversation went something like this:††