Financial advisors: "We're here for you!"

[Nords]

I subscribe to the print edition of Bloomberg Wealth Manager, a free industry rag for financial advisors. (It's always good to read your enemy's tactical manuals.) The July/August print edition had an article about "Advisor-free plans" implying that the industry will implode if investors actually start doing their own investing. In a letter to the editor, here's what James P. Martin, CFA & chief investments officer of Greystone Financial Group, Inc., in Troy MI had to say about that:

"If I provide incremental value to my clients by helping them make good financial decisions then others will seek my services. The short-term loss of revenue I might incur by consuming assets under management (by paying down client debt) will be overwhelmed by the revenue I will enjoy from attracting new clients & assets. We have numerous clients who would likely have accumulated and kept very little were it not for the discipline we impose and the education we provide. We do not expect to beat the market year in and year out. Our goal is to help clients do better than they would do by themselves. Using that criterion, our fees are an absolute bargain. In fact, we're even considering raising them."

I'm not sure how I'd determine whether he can do better for me than I'd do for myself-- especially with index funds. And is that before or after his fees?

I don't know if anyone actually has any money with this guy, but I thought that you'd appreciate the warning that the "bargain" is about to change...

 

[Mountain_Mike]

So, we are paying for his "services" to save us from ourselves, because we are such idiots we'd blow our money without his expert guidance?!?

 

[riskadverse]

Who's the biggest liar ?
1. Used car salesman
2. Real Estate Broker
3. Financial Advisor

 

[brewer12345]

So, we are paying for his "services" to save us from ourselves, because we are such idiots we'd blow our money without his expert guidance?!?

I think that is the implication, which is pretty insulting. Having said that, look around you and check out how Mr. Average Merkin manages his funds. Assuming an advisor could get them not to piss it all away on plasma TVs, $5 coffees, and Gawd knows what else, they might actually do a lot more good than harm (fees).

 

[nfs]

Walking into the lions' den ....

here's what James P. Martin, CFA & chief investments officer of Greystone Financial Group, Inc., in Troy MI had to say about that:

"...We have numerous clients who would likely have accumulated and kept very little were it not for the discipline we impose and the education we provide. We do not expect to beat the market year in and year out. Our goal is to help clients do better than they would do by themselves."

I'm not sure how I'd determine whether he can do better for me than I'd do for myself-- especially with index funds. And is that before or after his fees?

You might consider just how unusual you - and everyone else posting here - are. It should be clear that your attitudes re money are nothing like average attitudes.

The relevant question is not whether Mr. Martin "can do better for [Nords]". The question is whether he can do better for his clients. It would be grand if everyone had the discipline and education the local posters have. This forum is a terrific resource for providing it to others.

But let's face the facts. 99.9% of the US population doesn't know this forum exists, so where are they going to get their discipline and education? Maybe Mr. Martin will have to provide it.

 

[moghopper]

I think that is the implication, which is pretty insulting. Having said that, look around you and check out how Mr. Average Merkin manages his funds. Assuming an advisor could get them not to piss it all away on plasma TVs, $5 coffees, and Gawd knows what else, they might actually do a lot more good than harm (fees).

I have to agree. It's pretty obvious to those that frequent this board that we don't need advisors, or if we do, on a temporary fee-only basis.

However, most people don't have the average level of discipline of members of this forum.

 

[justin]

I think the guy Nords quoted is probably correct about "beating what individuals would have done on their own". A good example is our accountant at work. We have money and investing talks frequently. He putzed with stocks. I told him of my index approach ("set it and forget it"). Requires a significant (but reasonable) time investment to learn the approach, then it is a once a year job to rebalance. Fees are minimal. The accountant guy says, "you have you're way, I have mine", and leaves his money with an adviser (who sells load mutual funds). This guy is better off with an adviser than if he invested himself, assuming he won't take the time to learn the index approach. I think this guy is representative of the great majority of people in this country.

 

[Martha]

I know some people with professional careers, like doctors and lawyers, who need to have someone other than themselves manage their money. I have seen a number get into risky investments that they are not well suited to evaluate. They end up investing as "accredited investors" in investments exempt from registration, from small private placements to hedge funds. Just because people make the big bucks doesn't mean they know much of anything about investing.

I know one doctor who not only lost his investment in a real estate deal, but had signed a personal guaranty so a lender sued him personally for the deficiency after a foreclosure. Ended up filing bankruptcy even though he was making $500,000 a year..

 

[TromboneAl]

You guys have stated the problem very clearly.  The people who can't or won't take the time to educate themselves are screwed.

What would the world be like if there were a mandatory "Personal finance and investing" course in every high school?

 

[brewer12345]

You guys have stated the problem very clearly.  The people who can't or won't take the time to educate themselves are screwed.

What would the world be like if there were a mandatory "Personal finance and investing" course in every high school?

There are mandatory math and reaading courses in the schools now. How has that worked out?

Besides, they'd either be sponsored by Mastercard and Visa or they would be based on a system involving talents, shekels and cubits, at least in the pubic public schools.

 

[justin]

I remember we had this class that met once per week or so in high school called "homeroom". The teacher handed out photocopies of important literature on some pop issues like "integrity" or "self-worth" and the like. Then all the students continued talking and causing a ruckus for the remaining 44.5 minutes of the period. The teacher was supposed to teach us about "integrity" or "self-worth", but instead he did nothing because he knew the students didn't care about what he was talking about.

They should take that time to teach Personal Finances 101.

 

[moghopper]

...they would be based on a system involving talents, shekels and cubits, at least in the pubic public schools.

Only in Kansas. Eventually, though, they would be forced to accept "Flying Spaghetti Monster Finance."*


*My checkbook was touched by his noodly appendage.

 

[flipstress]

Having said that, look around you and check out how Mr. Average Merkin manages his funds. 

Not to be too crass  but isn't merkin some sort of wig for private parts?  Just more trivia in case some people get taken aback by the use of it to refer to citizens of our country.

(OK, I only know from someone's band name with that word in it.  I had to ask what it meant, of course...) 

Edited to delete link, which may offend board members.

 

[BigMoneyJim]

What would the world be like if there were a mandatory "Personal finance and investing" course in every high school?

Oh, that's an easy one. Kids would be taught the Schwabb/Prudential/Discover way of investing or similar. How could it evolve any other way? We are a small vocal group but wield no power over government or education. I've heard college finance classes have an unfortunate habit of steering people into loaded investments.

 

[Nords]

Not to be too crass  but isn't merkin some sort of wig for private parts?

That's not anywhere near as crass as the REASONS people wanted/needed to buy merkins!

And, of course, enquiring minds want to know if Al's beaver has ever needed a merkin.

I think Brewer is referring to "Murricans".  That's the way Gallagher pronounces it before he uses his sledg-o-matic on a watermelon...

Oh, that's an easy one. Kids would be taught the Schwabb/Prudential/Discover way of investing or similar. How could it evolve any other way? We are a small vocal group but wield no power over government or education. I've heard college finance classes have an unfortunate habit of steering people into loaded investments.

Hmmm, let the government or the industry teach my kid how to invest.  Tough choice. 

Imagine if we let either of those activities teach our kids about sex.  Hey, waitaminnit...

 

[flipstress]

I guess I was just trying to let brewer know the other meaning of merkin.

I did figure out he meant American, but not before thinking he was referring to the financial adviser, Mr. Martin.

Edited to put a smiley

 

[moghopper]

...good money to pour hot wax on that gift from God, and jerk it off...

no, That's a separate topic.

 

[BigMoneyJim]

OOPS!!!!

I must publicly and profusely apologize to Ha Ha and the entire board. I attempted to quote & reply a post on this thread from him, but apparently I hit "modify" instead of "quote" and trashed his post. (As a moderator I can edit any post.) The buttons are next to each other.

I have caught myself doing this on more than one occasion and corrected it before I hit submit. I usually notice because the [ quote] and [ /quote] are missing. After being notified that this happened I sat and thought about it a while and recall I replied to Ha Ha's post earlier today and had to add the end [ /quote] even though the first one was there. In retrospect I must've modified a post and didn't pay enough heed to the warning sign that my end [ /quote] was missing.

As you've seen, I typically quote only a portion of the post and as a result deleted most of his post. In this particular instance I was taking a phrase out-of-context for extra humor, but since I modified it in effect I completely changed the nature of "his" post.

I will be more careful of this in the future and hope the other moderators are not as clumsy as I.

 

[BigMoneyJim]

...good money to pour hot wax on that gift from God, and jerk it off...

no, That's a separate topic.

I recall now better what I thought I did and deduced what I actually did. The message you quoted from Ha Ha is the one I altered...I cut that part out of his message out of context, added the elipses and posted what was to be a humorous reply, but since I modified instead of quoted I removed the entire context and point of the original message (which I liked, by the way).

As a result what was left in that post by the time you quoted it had no material resemblance to his contribution. My goof not only removed his contribution but falsely put words in his mouth with what was to be my post. Mea culpa.

I am tempted to edit that post and take the quoted false quote out, but I'm not sure more moderator actions (even if intended) by me will improve the situation.

If anyone is offended by the quote, be offended at me, because as I say I took it out of context.

 

[brewer12345]

I guess I was just trying to let brewer know the other meaning of merkin.

I did figure out he meant American, but not before thinking he was referring to the financial adviser, Mr. Martin.

Edited to put a smiley

I'm well aware if the other meaning of Merkin. I think that referring to my fellow countrymen (and myself) in that manner injects a bit of much-needed humility and a reminder of how we appear to the rest of the world.

 

[Brat]

Mid-west residents should read the link I 'borrowed' from FundAlarm:

Detroit Free Press SUSAN TOMPOR: Know who pays brokers

http://www.freep.com/money/business/tompor19e_20050919.htm