Hi Scott,
We’ve just returned from a meeting with our financial adviser. It was the first time I’d met him face to face. He never really acknowledged my presence and spoke directly to my husband throughout the meeting, which made me feel uncomfortable – because it’s my money too! The statement of advice (SOA) has us in 16 different products. When I asked him why we needed 16 different products, he turned to my husband (not me!) and explained that this was normal and that each fund had been specifically selected to maximise our returns. My husband (a landscape gardener!) dismissed me and said “You just don’t understand investing”. I read you every week, so I thought this might be a good question to get your thoughts on.
Dina
Hey Dina,
Your experience reminds me of a meeting my wife and I had with an accountant many years ago. He turned to her and quipped, “Liz, I think there is plenty of money for shoes!” That meeting ended then and there, and we never saw him again.
You asked a very intelligent question, which unfortunately your husband clearly didn’t know the answer to … but I do. The reason the adviser has selected 16 different funds is that he wants to make your portfolio so complex that you’ll be forced to stick around and pay his fees each year. (There’s an old saying in the finance world: “Complexity is job security”). You do not need 16 different funds to maximise your returns. I have four diversified index funds.
Your husband is incredibly lucky to have such an insightful person by his side.