Some clients should stop investing for 12 months to pay off their debts.


“This is a terrific and timely commentary by Carrick. Reading it will improve your financial well-being. You won’t find too many regulators publishing such candid material for financial literacy month. OBSI and Investor Protection Clinics might consider it, though.

#1 Some clients should stop investing for 12 months to pay off their debts.

Investment companies like us make money by applying fees and commissions to the assets in client accounts. With interest rates rising, debt reduction should be the No. 1 financial priority for people with high household debt levels. See the problem? Recommending debt reduction is a money-loser for us, even if it delivers guaranteed financial benefits to heavily indebted clients and relieves one of the most significant sources of stress in their lives.

We have no answers for years like 2022.

You know how we told you that prudent portfolio diversification is the path to long-term investing success? Funny story. Those bonds and bond funds we put in your portfolio for stability dropped like a rock. Sorry about that, chief. Investing means getting punched in the face now and then, even as you keep progressing toward meeting your long-term financial goals.

Forget investments; the value of what we do is in the planning.

Honestly, it’s doubtful anything we recommend will consistently outperform a portfolio of cheap index-tracking exchange-traded funds. Forgive us for pretending otherwise because our business is still very much built on the outdated idea that financial success is about selecting suitable investments. Our time is most effectively spent in finding out your financial goals and then getting you there through a mix of planning and continuous coaching. Try selling that on a billboard.

Don’t worry about us – we’ll be fine.

As sure as night follows day, our advice fees get deducted from your account on schedule. The investment company always gets paid –that’s a rule you can count on. Middle-class and lower-income people are flotsam to us We may tolerate clients with lower five-figure amounts to invest, but they’re a nuisance because they don’t generate enough fee and commission income. Don’t expect us to say so directly and publish minimum account sizes prominently on our website. That would be vulgar. Instead, we rely on signalling, like the repeated word “wealth.” Forget advice – the business we’re really in is wealth management. Try your bank’s mutual fund counter if you don’t have much wealth.

Junk investments turn up in our portfolios.

Expensive mutual funds? Yeah, we’ve been known to use those in client portfolios. In-house funds that compare poorly with third-party offerings? Blush. Faddish new products to capitalize on trends where the easy money has already been made? Maybe, baby. There’s a show business aspect to the investment advice business. Keep the clients amused.

We’re good at talking to investors, not to them.

You say you’re losing money; we say the markets are volatile. You say your bond funds are getting massacred; we say fixed income is facing challenges. Talking in platitudes and jargon helps us gloss over the chaotic aspect of investing and make it seem like we have a handle on things. We don’t – that’s what financial planning is for.

You’re a bit of a slacker yourself.

I, your hard-working adviser, lay out a financial plan for you after many hours of work, and you file it with the slides from your 1975 vacation to the Catskills. I tell you it’s a good time to invest because stocks are down, and you say you’ll wait for the market to hit bottom. I ask that you stay in touch about events in your life, and you neglect to mention you’re divorcing, you tapped your retirement savings to give your teenage kid a home down payment, and your boss has been avoiding you for months. You’re supposed to be my co-pilot in managing your finances, not a passenger.

Brutally honest banking.

Check out last year’s list of six things a brutally honest banker would tell you about mortgages, home equity lines of credit and market-linked guaranteed investment certificates.”

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