Financial Advisors...Again.

[Manchesteral]

As a test, yesterday I had a meeting with a "financial advisor" My one and only question to him was: "if I invest one million euros on your advice today, can you guarantee me a return of one point one million euros return in 24 months ? his answer, no one can predict how the markets will perform ! why then, should I pay this clown a comission ? If I am investing money I don't want speculation, I want results !!
Re Paddy Pumpkins pitiful postulatation that people don't want to pay for advice, I would say that the only advice I would pay for is good advice !!

[wollie]

This reminds me of a true story i heard many times.
A regular pretty uninformed decided to go to a lawyer one day for advise on some topic i cannot remember.
The lawyer talked for a little while and when the meet over the man was just leaving the lawyer said.
Normally the fee for my advise is £10, reply "but i am not taking your advise"
Supposed to be true??

[Paddy Pumpkin]

Re Paddy Pumpkins pitiful postulatation that people don't want to pay for advice, I would say that the only advice I would pay for is good advice !!

This guy gave you good advice....he is right nobody can guarantee you a 5% return. So give him a call and pay him for his good advice,

[Manchesteral]

That's not the point of my, admittedly sad post Paddy, unfortunately I had one glass too many when I posted !!
My point is that most financial advisors are not willing to put their money where their mouth is.
As a matter of interest my wife's cousin has been taking care of a small amount of my money for some years now, he does not get upfront money for speculation, he get's 30% of any annual increase in my capital investment of which he has advised me or acted on my behalf, to date I haven't lost a penny, now that's good advice !

[katy]

Financial Advisors wouldn't be wasting time giving advice if they could predict the market. They just rely on commissions from the products you invest in. Some are more honest than others. Don't put all your eggs in one basket is my advice.

[Paddy Pumpkin]

That's not the point of my, admittedly sad post Paddy, unfortunately I had one glass too many when I posted !!
My point is that most financial advisors are not willing to put their money where their mouth is.
As a matter of interest my wife's cousin has been taking care of a small amount of my money for some years now, he does not get upfront money for speculation, he get's 30% of any annual increase in my capital investment of which he has advised me or acted on my behalf, to date I haven't lost a penny, now that's good advice !

I think you are confusing a financial advisor with an investment manager.

A financial advisor sells you insurance, tax mitigation products, helps you get your will in order. They can present you investment ideas (managed by others) but ultimately you decide on the investment. Effectively they are a shop window for many different financial professionals to advertise their products to the man in the street. They have a qualification in the UK known as a QFA.

An investment or portfolio manager is the person who actually actively manages and invests money. They can vary from someone who will invest in very very safe investments like government bonds in which if held to maturity you can only lose money if the government goes bankrupt. On the other side you have more risky investments which commonly fit in to the hedge fund description, a normal fee structure for smaller hedge funds is performance only fee. In my experience 20% of the profit is the normal fee in that situation. When the fund gets more established they will move to a fixed percentage plus performance. These funds can have a great track record and then nose dive in one year, just Google Michael Burry or John Paulson.

If I gave you the performance you are looking for (5%) for 15 years, it would double your money and you would tell me I am the best money manager ever. In 2002 if you put your money in the FTSE 100 you would have doubled in by 2017. However if you invested in 2017 until now you would be down about 15%, it shows timing can be everything...just like Paulson and Burry above.

I will make a sweeping assumption here that the majority of readers of this forum are either retired or not far off it. In which case none should be invested in actively managed funds and should be taking no risks whatsoever with their capital.

The best thing anyone in this situation can do is preserve capital and mitigate tax. Hence a QFA is what they need...although how we break the cycle of the QFA focusing on commission and clients not willing to pay for advice is beyond me

[gruff]

I've had the same company in the U.K. for financial advice for over 20 years and have done very nicely. I'm always happy to tell someone that I stop short of a recommendation in the same way I would not recommend my Dentist!

[katy]

I will make a sweeping assumption here that the majority of readers of this forum are either retired or not far off it. In which case none should be invested in actively managed funds and should be taking no risks whatsoever with their capital.

Absolutely agree Paddy. We can't take it with us when we go (assuming there is any money left )

[Paddy Pumpkin]

I've had the same company in the U.K. for financial advice for over 20 years and have done very nicely. I'm always happy to tell someone that I stop short of a recommendation in the same way I would not recommend my Dentist!

In a very similar vein...I have activey managed money as my profession for 15 years. I am now retired and manage a small very very safe fund which is all about capital preservation and very low returns. I have never managed money for friends or family.....I wouldn't recommend myself!