I
received a call from a prospective client today. She was upset at the major stock brokerage
firm that she was using. The caller was
in her mid-fifties and clearly had educated herself on many of the aspects of
being an investor. She was upset that
she and her 7 figure portfolio were shuffled to a new advisor when her old
broker left the firm. She was rightly
upset that she had no input in choosing who would handle her money.
Further
the caller was upset that she wasn’t receiving trade confirmations on a regular
basis and wondered what she was actually paying for the services she was
receiving.
These
are all great questions and ones that should be asked by all investors. The caller had indicated that her portfolio
was the result of a “windfall” and that she had been doing a lot of reading to
education herself from scratch.
While
I applauded her for asking these questions, towards the end of the call I
turned the conversation around a bit.
She had indicated that her portfolio was her major source of income and
that she didn’t know what she was spending on an annual basis. Further she really didn’t understand how her
money was invested or why.
I
indicated to her that I thought she was focusing on the wrong issues and that
she should focus on getting a financial plan in place and getting a handle on
her spending and the resources available and needed to support her lifestyle.
Clearly
this is not what the caller wanted to hear as she seemed fixated on determining
if the brokerage firm was doing what it claimed for her and if they were
overcharging her for these services. When
I asked, she did not feel that she was the victim of fraud or anything
related.
While
I can understand how she feels, her fixation on this is in my opinion causing
her to focus on the wrong things. What’s
the point of focusing on this broker, given that she doesn’t feel valued as a
client and that they had indicated to her that they wanted her to move her
account?
Investing
is about the best use of your dollars from this point forward. I hope that this caller will ultimately “let
it go” and hire a real financial advisor and listen to their advice.
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