Certified Financial Planner

This last week I attended the Matson Money investor coaching conference in San Antonio. As usual it was a great conference. I was even able to fulfill an item on my ‘bucket list’ I visited the Alamo. A visit I recommend to anyone watched the old TV shows such as Davey Crockett. The RiverWalk area is fun as well.

Each week I mention the Wall Street bullies and the need of an investor coach/fiduciary adviser for all investors. Well Mark Matson is my coach. I found Mark after an unfulfilling stint as a stock broker. His message is the same message I learned in financial classes in college and graduate school as well as my studies for the Certified Financial Planner® designation.

The message is:

The Free Markets work (Efficient Market Hypothesis)
Modern Portfolio Theory
Three Factor Model

work. I always found it curious that no one in the industry taught these academic concepts to new brokers. When I questioned this, the answer was those concepts only work in theory and do not work in the real world of investing. They were wrong…dead wrong.

The real reason the Wall Street bullies do not use these academic concepts is that it does not generate enough fees for the bullies. It doesn’t matter to the bullies if the investor is hurt and often severely hurt.

As I mentioned the conference was a great one. I also was able to hear the great Coach Lou Holtz speak, which I also highly recommend.

Essentially his message is the same as I have been writing about. To be a successful investor you need a prudent process and discipline. No one or no group can be successful without both process and discipline. This requires the guidance and vision of a good (great) coach.

I make an attempt to attend these conferences each year because I am reinforced that my beliefs are valid. Each event I attend Mark Matson’s message remains consistent. Follow the academic research provided us and remain disciplined.

We/I can be swayed by the media or public opinion or everyday life. Without the reinforcement of great coaches like Mark Matson we can easily begin to:

Stock Pick
Market Time
Track Record Invest

This in turn is nothing more than gambling and speculating with our investment money. If you are interested in attaining or re-attaining the American Dream gambling and speculating are NOT the answer.

Getting rich overnight, although possible, is highly unlikely. Working hard, saving and prudently investing our savings will lead to your long term goals. The American Dream is still possible however, there are no short cuts.

So, I will commit to attending the Matson Money conferences (at least) annually to maintain my strong beliefs in the free markets. It is up to you to find an investor coach to guide you to your American Dream.

Stop allowing the Wall Street bullies ruin your future NOW!!

If an adviser will not agree in writing to be a fiduciary to you, run do not walk away. This is saying that their advice is in the brokers’ best interest not yours. These non fiduciary advisers will have a different product for every situation. You will be better served with a prudent portfolio and remain disciplined. There are three simple rules of investing own equities, globally diversify and rebalance.

Different risk and return of investment for th... — Different risk and return of investment for the different investors (Photo credit: Wikipedia)

Conflicts-of-interest between financial advisors and their own clients remains a major problem in the financial services business since it costs investors billions and violates the fiduciary standard, according to author Chuck Epstein.“Conflicts-of-interest are common, especially in the mutual fund industry where fund companies pay investment professionals a fee, called revenue sharing, for recommending their own funds over a competitor’s,” Epstein said.

He added that revenue sharing has been called “the primary source of conflicts-of-interest, which taints professional relationships between investment advisers and their clients.” As defined by the SEC, revenue sharing occurs when the investment adviser to a fund makes payments to a broker-dealer for expenses it incurs when selling the adviser’s funds. These payments are made to investment professionals, who sell funds to individuals and 401(k) plan participants.

But in practice, revenue sharing is paid to advisers or 401(k) plans administrators based on how much they sell and how long an investor owns the funds. Since advisers receive revenue sharing payments regardless of fund performance, it can make it difficult for advisors who take revenue sharing payments to provide objective analysis, Epstein said.

Epstein, the author of “How 401(k) Fees Destroy Wealth and What Investors Can Do To Protect Themselves.” cited that a 2010 Government Accountability Office report found that “if left unchecked, conflicts-of-interest could lead plan sponsors or participants to select investment options with higher fees or mediocre performance, which, while beneficial to the service provider, could amount to a significant reduction in retirement savings over a worker’s career.”

Discover the Benefits of RIAs

One way to minimize or eliminate the dangers of receiving investment advice tainted by conflicts-of-interest is by working with a Registered Investment Advisor (RIA).

According to James Watkins III, JD, Certified Financial Planner®, AWMA® and owner of the blog, CommonSense InvestSense, “RIA firms are fiduciaries by law and, as such, are required by law to always put their clients’ interests first. What many investors do not realize and are not told is that many stockbrokers, insurance agents and other financial advisers are not held to a fiduciary standard, which allows them, some would argue requires them, to put their own financial interests ahead of their clients’ best interests,” Watkins said.

via mutualfundreform.com

The Wall Street bullies need brokers and agents to sell their ‘products’.. Investors need conflict free advice to successfully reach their long term financial goals. Seeking the advice of a fiduciary adviser will help investors reach these goals.

Please comment or call to discuss.

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