Over the past several weeks, a theme has emerged that I wanted to take a moment to discuss. This situation has come up both with current as well as prospective clients and I wanted to put a short piece together which we can refer back to, hopefully for years to come.
In my relatively short career as an investment advisor, I’ve spoken to a number people who have had an unfortunate experience with someone whom they trusted to manage their financial livelihood. Whether this was a broker, an advisor, or a full fledged scam artist, a resounding theme which has come up is that they’d been burned by a money manager. The discussions have ranged anywhere from losing a substantial amount of money, to investing in products which weren’t in their best interests.
From “My last guy didn’t make me any money in 5 years.” to “This guy came to my door and sold me an annuity and now he no longer works for the firm and I don’t even know who to call.” these conversations have been all too common.
In certain cases this has led to these clients/prospects to either give up entirely on investing for their future or worse, trying to go at this alone. Both situations are harmful, the latter being particular dangerous.
I believe that in almost all cases, this is not the fault of the client or prospect, rather a colossal failure of our industry as a whole. The majority of people in our country are hardly financially literate, and aren’t well versed in basic finance, let alone portfolio management theory or understanding the basics of proper asset allocation.
The two chosen stats above (website linked if you wish to read more) don’t bode well for a financially secure future. Neither does investing with someone who doesn’t have your best interests in mind, or who doesn’t know what the hell they are doing.
When I decided to make the jump to the RIA world, I did so because I gain great satisfaction from knowing that what we do can really make a difference in someone’s life. Whether it is helping them repair a damaged portfolio (we’ve seen some real messes), or answering a couple of simple of questions on where to start, it’s gratifying to know what we do matters.
Those adverse to working with an advisor have also commented that they don’t feel they have enough money for it to even matter. While it’s true that we can’t take on all accounts due to our minimums, that is a painful comment to hear. Honestly, I don’t care if you have $5,000 or $5,000,000, it matters, and probably a lot more than you think it does.
At our firm JSPM LLC we offer several strategies suitable to a wide audience of investors. If a prospect doesn’t fit any of the specified strategies, we build them a custom portfolio suitable to their risk tolerance and financial objectives. We aren’t going to be the right fit for every investor we talk to, but we have a lot to offer for people with varying levels of wealth, no matter the age.
With the volatile environment we’ve found ourselves in today, it is only natural that capital markets reflect this tumultuous volatility. Great damage can be done to one’s financial future if their investable assets are mismanaged. Our offer to you is that we will happily have a conversation with anyone who reaches out, free of charge. Whether you have some inheritance money you aren’t sure what to do with, are stuck in student loan debt, or have an old 401k or IRA sitting around at a former employer we want to help. If we can’t manage the account or don’t think we are the right fit for you, answering some simple questions to point you in the right direction is just fine.
We all start somewhere and starting today rather than a week, a month, or a year from now is always in your best interest.
Be safe and we look forward to hearing from you.
Trent Smalley, CMT & Ryan Morse, CMT, CFP.