Are you angry enough to torture your advisor?

Jon Chevreau · 06-25-2009, 01:41 PM

As I comment on my blog today, more than a third of American investors are angry at the financial community for the losses they've sustained in their retirement accounts the past year.
http://network.nationalpost.com/np/b...r/default.aspx

I also touch on the story earlier this week about the German retirees who allegedly "tortured" -- or at least beat up -- the financial advisor they perceived was responsible for them losing some $3 million between them.

So the question for discussion: do YOU feel angry? Angry enough to at least fantasize about torturing or beating up someone in the industry? If you do feel anger, how do you deal with it?

I also "tweeted" this at http://www.twitter.com/jonchevreau

CanadianCapitalist · 06-25-2009, 01:49 PM

Investors who work with an advisor may want to weigh in. I am a DIY investor and when mistakes are made, I have nobody to blame

larry macdonald · 06-25-2009, 04:39 PM

I don't use an advisor either and have just myself to blame for any losses. But I would like to see wayward financial advisors be liable for the fines levied against them in cases of wrong doing. As it stands, they dodge these fines by simply leaving the industry. Maybe that's why the financial advisory industry has such a problem with "bad apples." They could clear that up alot if the fine followed the "bad apple" out of the industry. That could be more of an incentive to be ethical.

HaroldCrump · 06-25-2009, 05:15 PM

IMO, the problem with "financial advisors" is not so much outright cheating or dishonestly but the lack of deep investing skills and a "one size fits all" attitude to their clients.
A lot of such so-called financial advisors are either (a) escaping from other out-of-favour professions, (b) doing this on the side to make some extra money in addition to their day jobs or ( c ) represent one of the many "investing" MLM organizations (Primerica, WFG, etc.) and have no real interest in the success of their client.

A few years ago I had a mutual fund agent talk me into signing up for some leveraged investing.
I asked for an investment strategy and sample portfolios.
He had me fill out one of those boilerplate "investor profile" sheets, after which he came up with a set of mutual funds.
All of them were high-MER funds, 7-yr. DSC funds.
They were all either closet index funds or very industry specific - without any regard for what suited me.
I suspected that he did the same for all his clients.
I am convinced he had no knowledge of, or done research into, any of the industries he was selling funds on.

Once they got locked into the DSC funds, he could sit back and enjoy the "fruits of his labour" - the trailer fees - for many years to come.
While his clients would still work their day jobs, making ends meet, scraping through to put away some for RRSP, etc. he could cruise on his boat sipping martinis.

A lot of advisors see this profession as their retirement plan - securing their early retirement instead of their clients.

takingprofits · 06-25-2009, 05:24 PM

I use an advisor for my RRSP account and took a big drop just like everyone else. Angry? Perhaps. Maybe annoyed is a better word.

Annoyed that the industry as a whole tends to favour complacency because it is the easiest route if clients are docile which gives them more time to find new clients rather than thinking about the actual investments - that perhaps stocks should be sold on occasion.

I was even considering making a change but the advisor proposed a more actively managed program going forward which was in line with my own thinking - so all is well for now.

In the future I may be more hands-on in that file than I had been in the past...

Rickson9 · 06-25-2009, 06:11 PM

People have nobody to blame but themselves. If they choose to go with an advisor (and all the marketing spin that they sell; ie diversification, asset allocation etc.), they deserve that they got.

I personally like the idea that advisor products (ie mutual funds) still charge a fee for big losses. But wait, wasn't diversification supposed to help minimize risk of loss? If my wife and I listened to advisors we would have lost a crap load of money. Heck, if my wife and I listened to advisors we probably wouldn't have as much money anyway...

There is a saying that says that, in the end, everybody gets that they want.

Assetologist · 06-25-2009, 07:20 PM

I know this is a cliche but 'Nobody cares about your money as much as you do" therefore you only have yourself to blame if you take losses greater than 1 standard deviation from whatever mean you target.

If you are high-risk, high-reward than expect to lose sometimes and occasionally lose big but it should not be substantially larger losses than your chosen benchmark (mean).

I have learned over the years that you must ask experts very specific questions so that their advice is tailored to your specific situation.

From a DIYer.

06-25-2009, 01:41 PM	#1
Jon Chevreau Senior Member Join Date: Apr 2009 Location: Long Branch, Ont. Posts: 203	Are you angry enough to torture your advisor? As I comment on my blog today, more than a third of American investors are angry at the financial community for the losses they've sustained in their retirement accounts the past year. http://network.nationalpost.com/np/b...r/default.aspx I also touch on the story earlier this week about the German retirees who allegedly "tortured" -- or at least beat up -- the financial advisor they perceived was responsible for them losing some $3 million between them. So the question for discussion: do YOU feel angry? Angry enough to at least fantasize about torturing or beating up someone in the industry? If you do feel anger, how do you deal with it? I also "tweeted" this at http://www.twitter.com/jonchevreau

06-25-2009, 01:49 PM	#2
CanadianCapitalist Administrator Join Date: Mar 2009 Location: Ottawa, Ontario Posts: 886	Investors who work with an advisor may want to weigh in. I am a DIY investor and when mistakes are made, I have nobody to blame __________________ Canadian Capitalist -- A Canadian Personal Finance Blog

06-25-2009, 04:39 PM	#3
larry macdonald Junior Member Join Date: Jun 2009 Posts: 6	I don't use an advisor either and have just myself to blame for any losses. But I would like to see wayward financial advisors be liable for the fines levied against them in cases of wrong doing. As it stands, they dodge these fines by simply leaving the industry. Maybe that's why the financial advisory industry has such a problem with "bad apples." They could clear that up alot if the fine followed the "bad apple" out of the industry. That could be more of an incentive to be ethical. Last edited by larry macdonald; 06-25-2009 at 05:46 PM.

06-25-2009, 06:11 PM	#6
Rickson9 Banned Join Date: Apr 2009 Location: Mississauga, Ontario Posts: 702	People have nobody to blame but themselves. If they choose to go with an advisor (and all the marketing spin that they sell; ie diversification, asset allocation etc.), they deserve that they got. I personally like the idea that advisor products (ie mutual funds) still charge a fee for big losses. But wait, wasn't diversification supposed to help minimize risk of loss? If my wife and I listened to advisors we would have lost a crap load of money. Heck, if my wife and I listened to advisors we probably wouldn't have as much money anyway... There is a saying that says that, in the end, everybody gets that they want. Last edited by Rickson9; 06-26-2009 at 11:41 PM.

06-25-2009, 07:20 PM	#7
Assetologist Junior Member Join Date: Apr 2009 Location: West Coast Posts: 28	I know this is a cliche but 'Nobody cares about your money as much as you do" therefore you only have yourself to blame if you take losses greater than 1 standard deviation from whatever mean you target. If you are high-risk, high-reward than expect to lose sometimes and occasionally lose big but it should not be substantially larger losses than your chosen benchmark (mean). I have learned over the years that you must ask experts very specific questions so that their advice is tailored to your specific situation. From a DIYer. __________________ I have never met a mutual fund I would buy and probably never will

06-25-2009, 05:15 PM	#4
HaroldCrump Senior Member Join Date: Jun 2009 Posts: 607	IMO, the problem with "financial advisors" is not so much outright cheating or dishonestly but the lack of deep investing skills and a "one size fits all" attitude to their clients. A lot of such so-called financial advisors are either (a) escaping from other out-of-favour professions, (b) doing this on the side to make some extra money in addition to their day jobs or ( c ) represent one of the many "investing" MLM organizations (Primerica, WFG, etc.) and have no real interest in the success of their client. A few years ago I had a mutual fund agent talk me into signing up for some leveraged investing. I asked for an investment strategy and sample portfolios. He had me fill out one of those boilerplate "investor profile" sheets, after which he came up with a set of mutual funds. All of them were high-MER funds, 7-yr. DSC funds. They were all either closet index funds or very industry specific - without any regard for what suited me. I suspected that he did the same for all his clients. I am convinced he had no knowledge of, or done research into, any of the industries he was selling funds on. Once they got locked into the DSC funds, he could sit back and enjoy the "fruits of his labour" - the trailer fees - for many years to come. While his clients would still work their day jobs, making ends meet, scraping through to put away some for RRSP, etc. he could cruise on his boat sipping martinis. A lot of advisors see this profession as their retirement plan - securing their early retirement instead of their clients.

06-25-2009, 05:24 PM	#5
takingprofits Senior Member Join Date: Apr 2009 Posts: 150	I use an advisor for my RRSP account and took a big drop just like everyone else. Angry? Perhaps. Maybe annoyed is a better word. Annoyed that the industry as a whole tends to favour complacency because it is the easiest route if clients are docile which gives them more time to find new clients rather than thinking about the actual investments - that perhaps stocks should be sold on occasion. I was even considering making a change but the advisor proposed a more actively managed program going forward which was in line with my own thinking - so all is well for now. In the future I may be more hands-on in that file than I had been in the past...

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