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A response to an article from Globe Investor

on Wed, 11/16/2011 - 08:06

Was reading tweets from Twitter and saw this tweet from Globe Investor.

I feel so attached because I feel exactly the same way. Read the article: Terrible financial advice – available at a location near you

I can say I truly started my career as a financial advisor was when I was a back office administrator. I had my insurance and investment fund licenses but I don't think I utilized them as much as I should have at that time. Anyway, at one point, I was partnering with another broker in the industry and a leverage program was the only product he pushed. I was mainly doing calculations and analysis at that time and didn't think of much beyond what I had to deal with.

While we did more and more businesses together, I continue to learn more on investment products, different strategies and such. I started to see what was the problem on what he pushed, which was very much like what that described advisor did: leveraging everybody.

In that kind of "strategy", the "advisor" never properly analysis whether the client is suitable for a leverage strategy or not. They may or may not get paid on the loan portion (a lot of advisor did get pay on loans at one point, but not from all lenders now), but of course they definitely get paid on the investments.

The real problem is not just that, but not follow through on what is going on along the way and not rebalancing at all. Some advisors might think when they pick mutual funds as investment vehicle, they do not have to do rebalancing, that is just so wrong… The fund manager pick stocks, advisors pick fund managers. Clients have at least 2 layers of rebalancing.

I am glad that I am no longer involved in that kind of practice and I am working hard to fine tune and rebalance my clients’ portfolio, with whatever I can do, the main goal of course, is to help some of these clients to recoup what they had lost in the market.

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