Despite increased disclosure requirements for reporting on investment portfolios, you need to take responsibility for what’s happening in your portfolios. Review your holdings, fees and investment strategy on a regular basis.
I continue to see disappointing advice rendered by some investment advisors. I recently reviewed a portfolio which made me question the advice provided. There was a cash component of 25% in the investment portfolio, which earned 1%, and all the income earned on the cash was paid in fees to the investment advisor.
The advisor didn’t have a full appreciation of the client’s financial position. She didn’t know her client was holding three times this amount of cash outside his investment portfolio. The portfolio should have been fully invested in equities, as there was a large amount of cash outside the portfolio. The client was doing his own fixed income investing.
When creating an investment strategy, the investment advisor has to be aware of all the client’s assets, and a co-ordinated approach should be followed. Don’t feel intimidated from asking questions. It’s your future and your money!!