Jelly_Belly
Active member
Financial advisor here.
A good financial advisor is like a teacher. My goal is to meet a client who has little to no investment knowledge and get them confident enough that in 2-3 years they can handle their own investments in through direct investing.
Quick disclosure. I work with clients with under 100k in investable assets.
If I met a client in their 20s/early 30s. I normally explain how risk works with markets.
I think a good started spread is 50% guaranteed investments like GICs and 50% in mutual funds.
Is my client gonna become rich through mutual funds? Course not. My goal is to expose them to risk and have them see how different securities behave. Maybe il go into a bond heavy fund if the client has a good understanding of interest rates and can comprehend the relationship between bonds and interest rates.
Maybe il go into a more stock heavy fund if my client understands how the stock market works. Either way my end goal is the same. Educate my clients can get them into direct investing in a couple years.
The Fund of funds that are offered at the branch level are honestly underwhelming as hell. There's so much compliance up our ass that we aren't allowed to expose the clients to real risk. So we stick them in funds that are so diversified to the point of often being a mutual fund composed of other mutual funds where any gains are mostly eaten away by management fees. Hence why it's my priority to get my clients ready for direct investing.
Now, for clients with 100k+. The wealth departments have much less compliance and can really offer clients quality advise. If the advice is worth the fee is up to the client. For most of the guys here. Why would it be worth it to offer you guys funds or investment advice when you can just place your on trades?
But for older clients or clients who have 0 interest in finance then it makes sense. Also, the management fees are deductible from your income.
For clients with 1M+ that's where private banking comes in. And those guys have a ton of services they offer. Everything from handling your investments to managing the family trust. Obviously for substantial fees.
Now. With the tiers of advice explained.
Are independent advisors better than bank advisors? It depends. Most independent advisors have min investments you must meet in order to unlock their services (same with the bank)
In my experience the bank advisors offer convenience since your investments are kicked to your debit card so you can see everything online. Their under the bank's banner so you know they are licensed and regulated up the ass.
What I will say, is for clients with under 100k in investments. Be careful. Most legit independent brokers only want clients with 100k+. So just be wary of who your giving your money to.
But above 100k it's all about who you wanna do business with and what they bring to the table.
Thanks for coming to my TedTalk
A good financial advisor is like a teacher. My goal is to meet a client who has little to no investment knowledge and get them confident enough that in 2-3 years they can handle their own investments in through direct investing.
Quick disclosure. I work with clients with under 100k in investable assets.
If I met a client in their 20s/early 30s. I normally explain how risk works with markets.
I think a good started spread is 50% guaranteed investments like GICs and 50% in mutual funds.
Is my client gonna become rich through mutual funds? Course not. My goal is to expose them to risk and have them see how different securities behave. Maybe il go into a bond heavy fund if the client has a good understanding of interest rates and can comprehend the relationship between bonds and interest rates.
Maybe il go into a more stock heavy fund if my client understands how the stock market works. Either way my end goal is the same. Educate my clients can get them into direct investing in a couple years.
The Fund of funds that are offered at the branch level are honestly underwhelming as hell. There's so much compliance up our ass that we aren't allowed to expose the clients to real risk. So we stick them in funds that are so diversified to the point of often being a mutual fund composed of other mutual funds where any gains are mostly eaten away by management fees. Hence why it's my priority to get my clients ready for direct investing.
Now, for clients with 100k+. The wealth departments have much less compliance and can really offer clients quality advise. If the advice is worth the fee is up to the client. For most of the guys here. Why would it be worth it to offer you guys funds or investment advice when you can just place your on trades?
But for older clients or clients who have 0 interest in finance then it makes sense. Also, the management fees are deductible from your income.
For clients with 1M+ that's where private banking comes in. And those guys have a ton of services they offer. Everything from handling your investments to managing the family trust. Obviously for substantial fees.
Now. With the tiers of advice explained.
Are independent advisors better than bank advisors? It depends. Most independent advisors have min investments you must meet in order to unlock their services (same with the bank)
In my experience the bank advisors offer convenience since your investments are kicked to your debit card so you can see everything online. Their under the bank's banner so you know they are licensed and regulated up the ass.
What I will say, is for clients with under 100k in investments. Be careful. Most legit independent brokers only want clients with 100k+. So just be wary of who your giving your money to.
But above 100k it's all about who you wanna do business with and what they bring to the table.
Thanks for coming to my TedTalk
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