Outside of one’s health and their family’s health, finances are our biggest concern. That is why the decision to pick the right financial advisor is so important. We at Saleeby & Associates appreciate the importance and gravity of such a decision.
Many investors do not have the time, patience, savvy or self discipline that is needed to manage their money. Couple this with the over 650,000 financial advisors in the U.S. and it is easy to see that finding an advisor suited to your needs, objectives and expected returns is truly difficult. More importantly, you want to find an advisor that you can trust to work in your best interest. An advisor must have the knowledge and experience to match a client’s objective and goals with market dynamics. We at Saleeby & Associates try to do this every day.
Performance is so important. Unfortunately, many clients are uninformed as to how they are doing or have done in the past. They are so busy working hard they have little time to focus on how their money can work for them. Many times they look at their relationship with their advisor as one of friendship, (i.e. a golf buddy), without looking at their financial performance or are stuck in a complacent mood until they realize their retirement is just around the corner. We urge you to compare us to what you have done, especially if you have been with the advisor for three years or more.
In a May, 2006 Kiplinger article, it is important to note that Jack Bogel, who started the Vanguard Group (primarily an index fund group) said that over 80% of mutual fund advisors do not beat the market over time. There have been numerous other studies showing the same results.
One must understand that investors usually do not have many years in which they can accumulate a meaningful savings to help them toward retirement or maintain their lifestyle. The 1-2% a year difference could be substantial due to compounding.
Furthermore, one must find an advisor with the ability to outperform benchmarks, match your risk profile and do it in a tax effective way that is in your best interest, not the advisor's. At Saleeby & Associates, we strive to help our clients achieve their financial goals as quickly as possible, at acceptable risk levels with minimal tax exposure. We are focused on your best interests and we are happy to supply referrals on request.
Over the last 10 years, the S&P composite average ending December 31, 2009 was down 1.2% per year1. A recent study by DALBAR (2009 Quantitative Analysis of Investor Behavior) showed the S&P produced an 8.35% annual return from 1988 through 2008. However, according to the same survey, the average equity investor realized an annual return of just 1.87% over the same period thanks to the adverse effects of market timing. That means an investment of $10,000 in 1988 would have grown to $49,725 over the past two decades if left untouched. But investors who panicked at market bottoms and chased returns as markets rose would have only $14,485 today.
There are two common misconceptions about the brokerage industry that you should be aware of. First, brokers who are "big producers" are not necessarily successful due to their own hard work or performance. Instead, many of these brokers inherit clients when other brokers leave the firm (luck & timing). Secondly, brokers do not always move to other firms with the sole interest of improving the client's well being. Instead, they go to firms who give them the most upfront money. Even though Ray Saleeby was offered generous compensation to join large firms in the St. Louis area when he left Forsyth Securities in 2001, he took no up front money from Cutter & Company, Inc. to choose their firm. He truly enjoys working for Cutter & Company and made the change to provide more services for his clients - not for a big upfront check.
With so many brokers, mutual funds, and money managers that underperform their various benchmarks (i.e., S&P, Russell, DOW…) you owe it to yourself to look over how well you have done and compare your portfolio results with others.
In conclusion, we would like you to compare your financial experience and results to us. We feel we can add value to your performance, provide great service, integrity and trust. Give us a chance to show you the difference Saleeby & Associates can make with your financial plans.
NOTES:
1. Thomson Reuters