Keep an eye out for best-selling novelist Patricia Cornwell’s next mystery novel. Likely here, Cornwell will invoke her intrepid crime-solving protagonist Dr. Kay Scarpetta to solve high crimes, misdemeanors and punitive breaches of fiduciary obligation not unlike those which Cornwell recently filed against her own investment management firm.

According to the October 23, 2009 issue of Financial Advisor magazine, Cornwell filed a lawsuit against Anchin, Block & Anchin a New York City wealth management firm, claiming that she lost many millions because the firm mismanaged her income, business and investments.

The claim alleges that the high-end concierge firm promised a luxury suite of services that included investment management, complete handling of personal and business matters and even such small but important details as “buying and delivering their toilet paper.”

Alas, however, it appears that the “jack-of-all-trades, but master-of-none approach to personal investments caused Cornwell to end up with far fewer assets than were reasonably expected through proper and prudent investment management.

Had Cornwell viewed her asset manager through the scrutinizing eyes of her attentive protagonist, surely she would have seen beyond the façade, asking the important questions that are imperative to identifying a trustworthy financial advisor.

Important Questions to ask a Potential Asset Manager

• What sort of investments will you make on my behalf and how will you be paid for your services?

• How much risk will you be taking with my investments and what is the return you expect to earn from taking those risks?

• Do you have peer-reviewed, academic research which incorporates reams of long-term documentation to support your strategy? 

• Will my brokerage statement come from a reliable third-party provider like Charles Schwab or Fidelity?

• Will my securities be transparent and marketable at all times?

In today’s “truth’s stranger than fiction” world in which the road to financial security is imperiled with advisor pitfalls of ignorance or clumsiness (misfeasance) and outright thievery (malfeasance), individual investors must assume the role of fiduciary detective when it comes to choosing whom they should trust with their hard-earned assets. 

Had the above important issues been hashed out and sufficiently answered to the satisfaction of an educated investor, it is likely Cornwell would not be suing for recompense, nor would she have so severely underperformed her investment objectives.

Like many other highly successful individuals, Cornwell may have been enticed by the ease of life offered by the sweeping concierge services. Certainly, it sounds like a lovely luxury to abdicate the business of one’s business to a seemingly knowledgeable and trusting firm, but education should never be short-cut, due diligence should never be undermined, and transparency should never be sacrificed, lest trusting investors find themselves with far less to entrust.

This was some very expensive toilet paper.