bytmergel01-28-201001:43 PM - edited 03-18-201011:06 AM
Marshall Lager is the founder and managing principal of Third Idea Consulting, LLC. We've hired Marshall to provide his perspective on the CRM industry, Sage news, and the state of customer/company dialogue in general.
We’ve been in this recession for a long time. What is it now, two years? (Answer: Yes. The National Bureau of Economic Research says it started in December 2007.) Businesses in all sectors have been hard pressed, especially financial services. That’s not really so surprising; the great sage Homer Simpson once said that beer was “the cause of and the solution to all of life’s problems,” and that sentiment applies fairly accurately to the stock market.
The desperation of the brokerages is plain to see if you catch their advertisements on TV or radio. Each is more eager than ever before to crow about its funds’ performance against this average or that index, as though it was the only company to have a clue how to make money in a down market. And each one’s advice is the same: Switch to us right now.
This is bad advice for just about everybody. The reason it’s bad is that things are tough all over. If any particular financial advisor was significantly outperforming the rest, we likely wouldn’t be in a recession, and that advisor would be raking in the bucks (even more than usual, since they profit by skimming the action like a casino does). Even Goldman Sachs, the company with more Washington influence than should be legal, is having its share of woes. Every broker has some funds that are doing well, and some that aren’t.
On the flip side of this, there are some Internet brokers advertising their own services on the premise that relationships are worthless. They suggest your relationship with your broker is a sham that only benefits the broker. For some people, this might be true. For others, there might not be a need to pay a commission to somebody else for your own informed financial decisions.
Changing your financial advisor is a major step, not something you do because of a commercial. In fact, making any change to your portfolio on a whim is generally a bad idea, though there are still day traders who think the path to success is rapid buying and selling. Successful investing is about patience, long-term plans, and—this is key—the relationship you have with your advisor. If you’re comfortable with your advisor, and believe they understand and are capable of helping you achieve your goals, you’re in the right place.
I’m open to disagreement on these points, as always. FinServ is not the business where I’m smartest, and the preceding post is heavily influenced by the opinions of people I respect and who know better. But isn’t that exactly what I’m talking about with relationships?