Category: Financial Advisor

You are guaranteed to lose money if you have a financial advisor “Alright, so I kind of understand the point about fees and stuff, but aren’t you being a bit hyperbolic when you say that you’re guaranteed to lose money? Surely that can’t be the case?” Let us revisit our previous example again: Notice the rate of return of “6%”. What does that mean? For this discussion, we’ll assume that the 6% is a *real return. *Tip: whenever you see “real x” in finances, it means x after you subtract…

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Fee Fees Fees! One of the most important things to understand when it comes to investing. “How can I know whether something I invest in will have a good return?” Fees! Low fees have been shown to be the best predictor of a high future return. A better predictor than past performance, current performance, or any theoretical future predicted performance. Low fees are the only proven consistent predictor of a good future return! Knowing this, it is imperative that you keep your investment fees as low as humanly possible when…

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Many financial advisors are linked to particular companies and are authorized to sell the products of that company. Every time they successfully sell the product, they receive a commission from the sale. That’s why in many cases it’s free to meet and talk to a financial advisor. They get paid by the company once they successfully sell you the product. This incentivizes the FA to push a whole host of products onto you that may have little to no benefit to you given your circumstances, and at worst may actively…

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Hey, med student bro! How’s your net worth looking nowadays? I’ve been thinking of dollar cost averaging into a total return stock market index-linked ETF in my tax-advantaged accounts, but I’m not happy with the level of intra-asset class diversification within the fund. Maybe it’s the market cap weighting they’re using? Not to mention I find the small hedge fund allocation a bit unsettling. Maybe I should consider de-risking a bit and adding an inflation-linked bond index fund as well? However, the bond yields have been on a downward trend…

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The Four Horsemen of your Financial Apocalypse: The financial advisor The car salesman The private banker The insurance broker The Financial Advisor “What’s wrong with having a financial advisor? Shouldn’t I get an expert to help with all this confusing financial stuff? I mean if you can’t do something yourself, you hire an expert to do it for you, right?” The reasons you should carefully consider whether the services of a financial advisor are in your best interest before signing up with one can be summarised as follows: 1) Everything…

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