May 2020

I hope this Tip of the Month finds everyone safe and healthy. We’re approaching the end of seven weeks of social distancing. Having spent so much time hunkered down, I’ve earned the right for a good rant!

Very few people could ever have expected us to live through what we’re experiencing. It’s given us plenty of time to reflect on what’s important in our lives, and I suspect when life gets back to normal, many of us will act differently. You should also reflect on how your professionals/advisors have conducted themselves.

I’ve written on numerous occasions that I’ve worked with several excellent investment advisors, also stating there are many advisors who don’t earn the fees they charge. If you’re primarily investing in the public markets, you should re-evaluate whether you’re receiving value for money from your advisor. If you have a portfolio of $1MM, you would be fortunate to only be paying $10K a year in fees. You might not know exactly what fees you’re paying, despite the transparency rules which were released a few years ago.

Many of the investment advisors remind me of the energizer bunny! They just keep charging and charging and charging, and never stop!! Once you’ve set up your investment strategy, how much work is involved in maintaining your portfolio? Your investment management fees are more than likely one of your highest expenses for the year. You never feel it because you don’t receive an invoice or make a payment yourself. It’s brilliant!

How often have you heard from your advisor this year? Are you satisfied with how your portfolio was structured? Has your advisor offered to change the fee structure you’re being charged? Could you do the job without an investment advisor? I expect you’re being told to “stay the course.” If you are, ask yourself what the value is that you’re receiving for the fees you’re paying. The whole industry needs to be re-engineered as far as I’m concerned!

Now I feel a whole lot better. Back to walking our dog, Georgia!

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