Last week, former Detroit Mayor Kwame Kilpatrick was charged by the US Securities and Exchange Commission (SEC) in an influence-peddling scheme involving the Detroit Police and Fire pension fund and one of their investment advisers. The SEC alleges, Kilpatrick solicited and received $125,000 worth of undisclosed perks paid for by the investment adviser. While this is just another item in the long list of accusations and illegal activities Kilpatrick has been charged with, it hits home to those of us in the investment advisory business.Sigma Investment Counselors focuses on high net worth individuals, and we do have a small number of institutional investors similar to pension funds. We pride ourselves on our adherence to a strict
code of ethics which includes the following sentence –
employees should not offer gifts, favors, entertainment or other things of value that could be viewed as overly generous or aimed at influencing decision-making or making the client feel beholden to the firm or the employee.
I do realize it is easy to point to the code on a website and tell clients we are ethical and professional. I believe what really speaks to our culture of compliance is the structure and organization of our firm. We have no history of disciplinary action by any government regulator nor have we ever been sued by a client. We are very proud of our good record with the SEC (although so was Bernie Madoff). Our compensation comes solely from what our clients pay us. We do not receive any third-party compensation based upon how client assets are invested and are committed to providing objective and unbiased advice. Sigma’s commitment to compliance and ethics are embodied by the presence of our full-time Chief Compliance Officer (CCO). The CCO’s presence in the office on a daily basis and participation on the investment committee insures that we are always working in the best interest for our clients.
The rules will continue to change and we will continue to build our compliance effort to be in accordance with them. Working to do what is best for the client will always be in our best interest.
Your questions and comments are welcome.
Marisa A. Lenhard, CFA, CFP®