My friend Joel

I have a friend named Joel. One day, he asked me to take a look at his investment portfolio. His investments were with a large, well-known brokerage firm. He really liked his advisor and felt like he was a friend who tried to put him in good investments. However, what frustrated Joel was that he never seemed to get ahead. His investments just seemed to go up and down a lot.

By reviewing together each of the mutual funds and stocks that had been purchased for him, I was able to show him why he was not gaining ground.

There were two things going on that were hurting his return and actually increasing the risk in his portfolio. One was the level of fees and commissions being paid to his friend and his friend’s company. The high fees and commissions were actually creating drag on his returns. The second was that he was simply invested in funds that were more speculative and had greater volatility —some of which he had been holding for years. Once we “peeled back the onion” Joel saw it right away. He was shocked.

Joel asked me a simple question: “Why would my advisor put me in such bad investments?” I told him that I could not speculate on why that was, but that I see it all the time. Sometimes advisers are required to sell investment products that make their company (and in turn the adviser) the most money. Other times it may be because the underlying fund pays an extra bonus or there is additional commission or compensation from the fund company.

Joel asked me what he could do about it. I knew that he was caught in a conflict – between a friend who he had trusted for years and the very real issue of not making money on his investments. He was not going to be able to retire comfortably if he did not grow his investments. He was actually starting to feel like he was now further behind on his financial goals.

Joel’s story is one I hear almost daily–people who find themselves with financial professionals, who they want to trust, but when they look at their real rates of return and the real level of risk they are taking, it leaves them dismayed or at least confused. In Joel’s case, he elected to work with me and I proposed a combination of strategies that I felt were more closely aligned with Joel’s financial goals.

I am an independent advisor who stepped away from doing things in the traditional way. I did my own research. Now, I do everything I know how in working to minimize risk for my clients and provide investment choices that are designed to truly help them meet their goals. Give me a call. In a complimentary consultation, I’ll walk you through my strategies and explain how you can take advantage of risk-averse investments to achieve your financial goals.