QUESTION FROM AN ADVISOR:

I recently made a proposal for managing money for a church committee – all members were great except for one attorney who ranted about fees, expenses, etc. and proposed the group pick its own funds. I framed the issue as one of help vs. no help, but this attorney was totally unmoved and kept trying to argue with me. I am not taking the $250,000 account. Isn’t it as important that all members trust me as it would be if it were a one-on-one relationship? Any advice?

NICK MURRAY'S ANSWER:

One of the enduring myths of our profession is that the institutional sales process is rational in a way that dealing with individual investors is not. Each of us has to learn the hard way two important ideas.

1. The 12 smartest people in town, formed into an institutional investment committee, become the single dumbest person in town.
2. A committee is only as rational as its craziest member.

My advice would have been to withdraw your proposal and excuse yourself – with exquisite courtesy – as soon as it became clear that this guy wasn’t going to stop beating you up. Now, no matter what anyone says to you, you must refuse to take the account while this nut remains on the committee. And yes, all the members have to trust you, but even more than that: the committee’s relationship to you, like any client’s, must be premised on their conviction that you add value in excess of your cost, however that value may be denominated.

Now, go find a nice, sane, functional human family that (a) has $250,000 and (b) needs and wants your good help.