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value of your portfolio at the beginning and end of the year; the amount deposited into the portfolio and the amount withdrawn, including fees.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.
Have you ever thought you might perk up your investment portfolio by putting money into real estate securities, an early-stage mining venture, or a start-up company that a friend or family member is trying to launch? If so, then you’re thinking about taking on more risk by investing in the private placement market. Both public […]