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I study markets, trends and learn from the past. One major trend that is becoming more prevalent is advisors investing only in what their clients feel is right. They are more interested in managing more and more money than they are in helping these investors. It is a lot easier to attract a new client if you agree with everything they say. They feel that you are compatible with each other. In other words they are being paid to agree with you.

Part of the reason this happens is when large institutions take away the independence of their investment advisors. The only goal becomes the advisors’ goals and not their client’s Independence. This allows them, and their institution, to manage more money to earn more profits. Capturing market share is the main goal of these institutions. You never hear how they did for their clients.

Are you your advisors first priority?

This is not new. Several years ago I was at the annual retreat of the institution I was with when the CEO came up to speak. He stated our division had a great year because WE LOST LESS LAW SUITS than the year before. He congratulated the legal team, not focussing at all on satisfying client needs. The few days we were there only focussed on bringing in more client money, higher margin products and how we could drive more profit to the company’s bottom line. In the main room, as well as the breakout sessions, meeting our clients’ needs never came up.

Your Independence is all that matters

When you work with an advisor who works with you towards your Independence you will grow, refer friends and family and have this advisor work with all of your investments. Together you will grow and stay together. You won’t have to find a new investment advisor and the advisor can spend more time focussing on their clients than prospecting (looking for new clients). You both win.

I have written in the past about the investing public making the wrong decisions when left to their own devises. I have just read the results of a study from J.P. Morgan Asset Management showing that comparing the average client’s individual investing over 20 years compared to the investment sectors:

Investors equate trading with investing

20 year annualized returns by asset class (1994-2013) 

The average do it yourself investor earned 2.5%. The only sector they beat was inflation. This is a huge missed opportunity - FOR TWENTY YEARS.

What does an advisor add to your Net Worth?

Below is a chart of another study that helps explain how advisors help from an Investment Funds Institute of Canada study*. It shows that an investor with an advisor has 2.73 times as much money after 15 years compared to those who do it themselves (that’s just the average of all advisors; including those having their products dictated by head office). That means if the average investor has by themselves grown their investments to $366,301 in 15 years, the average investor would have had a MILLION DOLLARS using an advisor. Just imagine the growth with a good independent advisor.

*Reference: The Investment Funds Institute of Canada Value of Advice Report 2012

Unfortunately more and more advisors are investing their clients’ money with the client directing the portfolio balance. Both will lose, but most importantly the client will lose their Future Independence. What a disturbing trend.

Don’t forget that your portfolio must suit your individual risk profile, as well as be a portfolio that is crafted for the future.

YOUR INDEPENDENCE MATTERS and if you want to see what a truly independent investment/insurance advisor can do for you, call me at 905-846-9060, ext.3838, email me at Terry.McIntyre@manulifesecurities.ca or visit my website at www.terrymcintyre.ca