This is a rant from an individual who considers himself an advisor and advocate for his clients. The first myth I would like to dispel is the idea that just because someone works for an RIA or is a fee only advisor they are not a salesman.
Instead of looking for a FA, that is this or that, please just evaluate them on one criteria. Are they a salesman or are they there to advise you on your financial life. I know that this goes against the grain of everything you have heard but just keep reading.
Just because you are working with an RIA or a fee only advisor you are not guaranteed impartiality. Sorry to burst your bubble but that is how life works. For example they will only sell you certain funds that pay a commission to the firm and the advisor. Oh.... you want to buy a vanguard index fund, nope not happening we have this A share fund and that is it. SEE LOOK!!!! we can only sell you certain funds and since they charge the same commission we are fulfilling our fiduciary relationship. THIS IS WHERE THE INDUSTRY IS GOING PEOPLE!!!!
Ok. now you will say BUT if you just buy an S&P 500 index fund you will do better than most advisors and managers, follow Warren Buffet's advice. NO SHIT!! This is true and should be used by everyone. BUT guess what??? Most people are not smart enough or disciplined enough to do this. People hire advisors like me to keep them on track. To keep them grounded when the market turns bad. Mostly to keep them invested. Yes you heard me "to keep them invested." Your grandma or aunt that you want to take over the account and invest in VOO because you read on the inter-webs that it is the best thing since sliced bread. Guess what happens when the market drops 25%. She fucking sells out and does not buy back in for years. This is the reality of the situation. This is why most advisors will buy a growth moderate income fund or balanced fund, because guess what? Most people are OK with mediocre returns if they don't lose money in sharp declines. This is the real secret to the business. we work to keep people invested NOT make them the most money possible.
- How do you select an advisor you ask. here is how. Ask FUCKING questions.
- Education: sociology major or English major, yeah fuck that guy
- Time in the industry: your cousin who cold called you, fuck him.
- AUM: this should be at least a few million if he is with an RIA, much more if a broker!!!
- Captive or independent: go independent all the way or get the shit "A share" funds.
- Ask them technical question. If they can not explain a PE ratio run or how a stock price is affected by a dividend then run.
- Ask for stock picks!!! No joke but don't buy them ( you will likely lose money). Because if they cant give you any analysis on a single stock why the fuck should you talk to this guy. They are a salesman nothing more.
- Don't buy shit from your CSR at the bank!!!!
- Will they work with your insert CPA, Lawyer, business partner?
- Speaking of that don't use your CPA or Lawyer as your FA. Conflict of interest.
- Beware of the old fuck who has 2 years experience but looks like he has 25 years in the industry. Usually overweight balding and wearing a J. Bank Suit from the buy one get three free line.
- Oh yeah the guy that seems to give zero fucks about you and your money. That is the one you want. Why??? because he does not need to sell you shit to pay his bills. He will give you advice based on your best interest not his. His car and mortgage are golden and do not depend on your $10,000 IRA to keep his BMW from the repo man.
A few more things
Whole Life insurance: FUCK WHOLE LIFE INSURANCE. This is the worst investment known to man. Buy term. Whole is a savings account with life insurance attached.
Annuities: These get a bad rap but are great if you understand what you are buying. Most people do not. CD at 1% for 5 years or a fixed annuity at 2.4% for 3 years buy the fucking annuity. $200,000 in your MMA for the last 10 years thinking interest rates will go up. Buy an Index annuity for 7 years at a cap of 5%. Fuck you were not doing anything with the money anyway. See my point!!!
Mutual funds: Just buy an index funds. There I said it. But really it is your best bet to make real money. If you can not deal with the ups and downs look to a no load fund from a reputable company with a fixed income component.
Individual stock: The only way to beat the market. Also the quickest way to lose money. buyer beware.
This rant is not geared to people who can invest for themselves. It is geared toward those that want to evaluate and Advisor without the sugar coating from someone in the industry.
Submitted June 14, 2020 at 10:47PM by kewil37089 https://ift.tt/2BZORfc
