In an article in globeinvestor.com, Dan Richards (Strategic Imperatives) makes the point that after last year’s market debacle, more people are doing their homework on how and where they should be investing their money. The net result is that they are asking tougher questions, requiring financial advisors to spend more time and effort responding with evidence and support for their advice.
That is good news. For too long, investors have been unprepared or not confident enough to play devil’s advocate with their advisor. While it’s true that most of us have become much more comfortable questioning our doctors, it’s not true that we have been able to question our financial advisors until very recently.
For example, everyone has to receive account statements every three months, unless the client asks for it on a monthly basis. It contains a lot of information – transactions, sales, purchases, transfers, the name and number of securities, the price and total value of the transaction. But, as Dan Richard rightly points out, people don’t want to read a lot of detailed information. Our attention span is short and most information that we receive, we don’t read because it doesn’t provide any value to us.
So one of the vows you might consider making for 2010 is to request an annual or semi-annual chart that describes the value of your portfolio at the beginning and end of the year; the amount deposited into the portfolio and the amount withdrawn, including fees. This will give you a clear idea of what’s happened to your financial portfolio over a six to twelve month period.
If you are really on a roll, you also might want to ask you financial advisor to learn how to speak plainly and in a way that is easily understood, avoiding jargon and industry terms that you are not familiar with. Then, you can enter into a dialogue with your advisor that brings value to both parties.
BCSC staff ambassadors tour the province, helping people to protect themselves from fraud and unsuitable investments. Our goal is to enable BC investors to develop critical thinking skills so they can become more informed of steps they should take to protect themselves when investing. Where we are this month SurreyNational Senior’s day October 110:00 am […]
The St Louis Dispatch Post reported on Saturday that over 40,000 investors in more than 120 countries lost $70 million in a Ponzi scheme. It appears that this is another one of those high yield investment programs (HYIPs) that Wikipedia calls a “type of Ponzi scheme.” The Canadian man who is alleged to be behind […]