Independent Financial Adviser
LongExcursion,
Congratulations!...you seem to have done very well!
But, a word of caution, from what you have written, your advisers appear to be gambling with your money on exchange rates. It is really good to hear that they indicate to you that you are up at the moment and furthermore they are sending you black and white accounts that appear to substantiate their claims.
To validate what you are hearing, make a call on them and tell them to withdraw all funds and deposit the full amount in your independent bank account. It this happens without delay and without quibble, then I think you have possibly a reliable adviser. As soon as you have all funds back, when you feel comfortable, you can start the investment process again...no loss.
But, if you hear things like, no that would cause a loss, your funds are tied up, you would miss out on further gains, quack, quack etc...then "Houston, we have a problem"...you have just become the latest casualty...
Congratulations!...you seem to have done very well!
But, a word of caution, from what you have written, your advisers appear to be gambling with your money on exchange rates. It is really good to hear that they indicate to you that you are up at the moment and furthermore they are sending you black and white accounts that appear to substantiate their claims.
To validate what you are hearing, make a call on them and tell them to withdraw all funds and deposit the full amount in your independent bank account. It this happens without delay and without quibble, then I think you have possibly a reliable adviser. As soon as you have all funds back, when you feel comfortable, you can start the investment process again...no loss.
But, if you hear things like, no that would cause a loss, your funds are tied up, you would miss out on further gains, quack, quack etc...then "Houston, we have a problem"...you have just become the latest casualty...
Join Date: Feb 2008
Location: db
Posts: 7
Likes: 0
Received 0 Likes
on
0 Posts
The Long and The Short of it
It's a fact that if Berkshire Hathaway operated as a fund manager, charging typical Hedge fund fees (5% up front, 2 % annual and 20% of profit) the approx 62 billion currently shared by the investors would be worth 5 billion in the investment fund, and 57 billion in the management fund!!(2009 figures).
IFA's and fund managers make a fortune off gullible punters. Do your own research and look after your own money, and avoid paying any commision to vultures.
IFA's and fund managers make a fortune off gullible punters. Do your own research and look after your own money, and avoid paying any commision to vultures.
Join Date: Feb 2010
Location: Dubai
Posts: 21
Likes: 0
Received 0 Likes
on
0 Posts
Flex/Kluge: I like the fact that there's no entry/exit fees. They charge a 2% annual management fee and a 20% performance, but only if they make money. That, plus the fact that the advice/service they provide on hedging my apartment for example is included, are big winners for me. I've no qualms paying someone an incentive fee if it makes them work harder for me and they actually meet/exceed their promised performance benchmark. Having been paying a super fund back in Aus less in fees and having less in my account now than what I've put in there, you sometimes get what you pay for.
As for "gambling", I dont know about you guys, but I'm sick of the Aus based super fund manager I have money with also telling me how safe equities are as an asset class over the long run in response to me complaining about his negative gross returns over the last 5 years and they still have the gaul to charge me for it. I reckon it comes down to the managers.
No idea about collateral. Might be worth asking though.
No penalty costs on withdrawing money because the money's in my name. They get you to sign a document when you apply which gives them authority to trade your funds, but they dont control them, the account holder does (ie. the investor).
I think personally what makes a huge different is that these guys are still small (total managed funds less than $100m). They always return calls/emails and you constantly get a sense that they're working their a.ses off for you and adding value. Hopefully they can continue that service/performance mix as they get bigger.
As for "gambling", I dont know about you guys, but I'm sick of the Aus based super fund manager I have money with also telling me how safe equities are as an asset class over the long run in response to me complaining about his negative gross returns over the last 5 years and they still have the gaul to charge me for it. I reckon it comes down to the managers.
No idea about collateral. Might be worth asking though.
No penalty costs on withdrawing money because the money's in my name. They get you to sign a document when you apply which gives them authority to trade your funds, but they dont control them, the account holder does (ie. the investor).
I think personally what makes a huge different is that these guys are still small (total managed funds less than $100m). They always return calls/emails and you constantly get a sense that they're working their a.ses off for you and adding value. Hopefully they can continue that service/performance mix as they get bigger.
Last edited by LongExcursion; 16th May 2010 at 07:47.
Financial Advisers are motivated by making money for themselves.
Excessive performance fees encourage investing in high risk, high reward ventures to maximize returns in order to maximize their performance fees.
If they get it right, they get good fees and you get good returns.
If they get it wrong, they only miss out on their performance fee, but you get wiped out.
If you get wiped out, it is not a problem to them, their are plenty more folks like you out there.
They get to gamble with your money and share the profits, but they don't share any of your losses.
YOU carry ALL the risk.
Think about it...You can't lose if you gamble with someone else's money.
Excessive performance fees encourage investing in high risk, high reward ventures to maximize returns in order to maximize their performance fees.
If they get it right, they get good fees and you get good returns.
If they get it wrong, they only miss out on their performance fee, but you get wiped out.
If you get wiped out, it is not a problem to them, their are plenty more folks like you out there.
They get to gamble with your money and share the profits, but they don't share any of your losses.
YOU carry ALL the risk.
Think about it...You can't lose if you gamble with someone else's money.
Join Date: Feb 2010
Location: Dubai
Posts: 21
Likes: 0
Received 0 Likes
on
0 Posts
I think this is where we should finally draw the distinction between a Financial Advisor and a self-invested Money Manager. My instinct in handing my money to someone else is not just that I have confidence in their integrity and track record but that they have skin in the game themselves, as these guys do. That way, both parties are investors with stakes to make or lose. Its the most direct way of tying their incentives to your own.
Financial Advisors connect investors with Money Managers. There's a significant difference in context, motivation and remuneration.
Ultimately, we make our own decisions. I get the impression threads such as these are akin to drunks drawn to standing underneath a lamp post, they're there for support rather than illumination.
Financial Advisors connect investors with Money Managers. There's a significant difference in context, motivation and remuneration.
Ultimately, we make our own decisions. I get the impression threads such as these are akin to drunks drawn to standing underneath a lamp post, they're there for support rather than illumination.
Last edited by LongExcursion; 3rd Jun 2010 at 12:32.
but that they have skin in the game themselves
With the next client they have to you, they have done the opposite trade with his skin as a hedge...that way they can't lose...
...if they lose with your trade they win with his...if they lose with his trade they win with yours.
Notice that their "loss" cannot be a negative figure to them...that they always get paid their management fee and with every second client they get paid a bonus?
Are you paying attention..?
Join Date: Feb 2010
Location: Dubai
Posts: 21
Likes: 0
Received 0 Likes
on
0 Posts
Not really, because u seem to have confused some of us with idiots.
The thread began with a colleague wanting to know if any of us had had good experience with giving our money to someone else to manage and if so, who. I think it’s fair to assume that he was asking because, like most of us, he didn’t have the time, experience or confidence to invest it himself.
Your response was an emphatic, “no”, and your advice was that we should buy a book, teach ourselves a brand new skill and invest our own money because as far as your obviously narrow experience had taught you the only way to be financially secure into retirement is to either put our money under a mattress or become a financial investment guru overnight. Your proposition that there wasn’t a single money manager on the planet who was able to provide reliable, long term returns worth paying for wasn’t just completely dismissive, but oddly impassioned. You then hand-picked a portfolio made up of a list of Australian equities and unwittingly showed us first-hand how foolhardy it is for us to assume that we can pick stocks with the aid of a text book, a brokerage account and a few newspapers whilst flying passengers fulltime. The most obvious case in point being your pick of Babcock and Brown, who’s share-price didn’t just collapse they actually went bankrupt. That’s 100% loss on an investment if we’d have brought shares in them, right?!. The net worth of the entire paper portfolio you selected I'm presuming based on whats happened to the sharemarket since is now worth less than what it was virtually purchased it for. And given the point you were trying to make, one can assume you selected what you thought was a sure-fire group of financially sound and reputable businesses. Conclusion: if managing money was something we could do easily, we’d more likely be sitting on a beach in the Maldives with our feet in a bucket of champagne than flying red eye shifts and fighting for bonuses for airlines that seem to care less and less about their qualified personnel.
I wouldn’t feel better losing my own money given my skill-base anymore than I’d feel better handing the control of my plane over to a kid with a RPPL in the midst of a thunderstorm. There are aviators and there are pilots, just as there are guys that handle money well and many that don’t. I can remember a legal friend of mine saying to me once when I asked if needed divorce advice, “The man who defends himself in court has a fool for a lawyer”. Ergo, there are some professions where you need qualified, competent help.
How many passengers get onto our planes and ask to see our qualifications before sitting down? None. Why? Because they assume that either airline or the person sitting beside them has done the due diligence for them and assume that in the event of disaster that every airline pilot has the same experience and skills. Your advice to all passengers would seem to be, hey don’t get on a plane or find an airline with a verifiable safety record, teach yourselves to fly instead and be in control of your own destination. There’s nothing wrong with that, but if the person asking the question
The reality is, its hard enough finding the time to spend with our wife n kids let alone learning enough about financial markets and asset classes to have enough confidence to do it better than the professionals in it and then keep monitoring those markets in order to then be informed enough to respond accordingly. There’s enough stress on the flight-deck and in the day to day politics of fighting for the next bonus whilst keeping my eyes open on-approach, without having to ask my F/O to pass me the financial pages mid-Atlantic when my mind and body is drained from over-work. So until I retire and I have the time to devote to watching the finance markets gyrate, I’m happy to have found some sharp guys to look after my hard earned. In the interim, another month just passed and these guys just increased my net worth another 2.1%. From what I read, equity markets seem to be collapsing and there's more panic. I’ve don’t have any complaints paying a commission to someone who seems to be sheltering me from that.
The thread began with a colleague wanting to know if any of us had had good experience with giving our money to someone else to manage and if so, who. I think it’s fair to assume that he was asking because, like most of us, he didn’t have the time, experience or confidence to invest it himself.
Your response was an emphatic, “no”, and your advice was that we should buy a book, teach ourselves a brand new skill and invest our own money because as far as your obviously narrow experience had taught you the only way to be financially secure into retirement is to either put our money under a mattress or become a financial investment guru overnight. Your proposition that there wasn’t a single money manager on the planet who was able to provide reliable, long term returns worth paying for wasn’t just completely dismissive, but oddly impassioned. You then hand-picked a portfolio made up of a list of Australian equities and unwittingly showed us first-hand how foolhardy it is for us to assume that we can pick stocks with the aid of a text book, a brokerage account and a few newspapers whilst flying passengers fulltime. The most obvious case in point being your pick of Babcock and Brown, who’s share-price didn’t just collapse they actually went bankrupt. That’s 100% loss on an investment if we’d have brought shares in them, right?!. The net worth of the entire paper portfolio you selected I'm presuming based on whats happened to the sharemarket since is now worth less than what it was virtually purchased it for. And given the point you were trying to make, one can assume you selected what you thought was a sure-fire group of financially sound and reputable businesses. Conclusion: if managing money was something we could do easily, we’d more likely be sitting on a beach in the Maldives with our feet in a bucket of champagne than flying red eye shifts and fighting for bonuses for airlines that seem to care less and less about their qualified personnel.
I wouldn’t feel better losing my own money given my skill-base anymore than I’d feel better handing the control of my plane over to a kid with a RPPL in the midst of a thunderstorm. There are aviators and there are pilots, just as there are guys that handle money well and many that don’t. I can remember a legal friend of mine saying to me once when I asked if needed divorce advice, “The man who defends himself in court has a fool for a lawyer”. Ergo, there are some professions where you need qualified, competent help.
How many passengers get onto our planes and ask to see our qualifications before sitting down? None. Why? Because they assume that either airline or the person sitting beside them has done the due diligence for them and assume that in the event of disaster that every airline pilot has the same experience and skills. Your advice to all passengers would seem to be, hey don’t get on a plane or find an airline with a verifiable safety record, teach yourselves to fly instead and be in control of your own destination. There’s nothing wrong with that, but if the person asking the question
The reality is, its hard enough finding the time to spend with our wife n kids let alone learning enough about financial markets and asset classes to have enough confidence to do it better than the professionals in it and then keep monitoring those markets in order to then be informed enough to respond accordingly. There’s enough stress on the flight-deck and in the day to day politics of fighting for the next bonus whilst keeping my eyes open on-approach, without having to ask my F/O to pass me the financial pages mid-Atlantic when my mind and body is drained from over-work. So until I retire and I have the time to devote to watching the finance markets gyrate, I’m happy to have found some sharp guys to look after my hard earned. In the interim, another month just passed and these guys just increased my net worth another 2.1%. From what I read, equity markets seem to be collapsing and there's more panic. I’ve don’t have any complaints paying a commission to someone who seems to be sheltering me from that.
Last edited by LongExcursion; 8th Jun 2010 at 10:50.
LongExcursion,
That was a really excellent reply. I admire and respect your intellect and wisdom. I very much appreciate the length and depth of thought that has gone into your reply.
There is room for many points of view that are equally valid and you have reminded me of exactly that.
Best regards,
FlexibleResponse
That was a really excellent reply. I admire and respect your intellect and wisdom. I very much appreciate the length and depth of thought that has gone into your reply.
There is room for many points of view that are equally valid and you have reminded me of exactly that.
Best regards,
FlexibleResponse
