At dinner the other night one lady gave me her tale of investment woes. In the late 1990's she contacted one of our major banks to get an investment advisor. This she did. She said that she asked that her money mainly go to fixed income.
What he invested her money in was mainly tech stocks. After the tech bubble burst and she lost most of her money she complained. There is an ombudsman for bank services and investment. After some 4 or 5 years she said that she got some of her money back.
I can see why this happened and why she was lucky to get some. She did not complain when she was making money, but only after the bubble burst. No matter who you are investing with, they must provide monthly statements. She should have complained right away that the advisor was not investment her money the way she wanted.
She has to take responsibility here. To wait until after she has made and lost money is far too late. Yes, the advisor should have invested the money the way she wanted. He probably thought he was doing her a favour in investing in tech stocks. Everyone in the late 1990's was gaga over tech stocks. Nevertheless, she should have complained immediately.
It has always amazed me that people will spend more time and effort over items that cause a few bucks than thousands of dollars in investing. It is fine to get an investment advisor. However, it is your money and you have to provide oversight. Investment often comes down to common sense. Does what your advisor want to do make sense to you?
Another lady at the table said that she had invested for a number of years with a financial advisor at the same bank and that she has done just fine.
Here is a link to a blog posting by My Own Advisor on "How to dump your big-bank financial advisor financial advisor".
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