Don’t praise your Financial Planner for good returns… But, don’t give them sh*t for bad ones either
You should never find yourself in a scenario where you are wishing to thank or praise your Financial Planner for making a tidy profit on your investments.
A proper Financial Planner will have set your investments up into a globally diversified equity portfolio that is positioned for long term growth. They should also ensure you have plenty of cash to act as a safety net and buffer for any planned or unplanned expenditures in the interim years.
There are other holdings that can be acquired, in tax efficient areas like Venture Capital and so on, but fundamentally the investment portfolio should be simple, effective, following the great companies of this world and adhere to the principle of ‘invest and forget’.
If this is done correctly your portfolio will return superb, above inflation returns for decades to come. It is not down to any particular insight or specific fund knowledge on the adviser’s part, just their expertise and experience of knowing exactly how real long-term investing works.
Good investment returns are not necessarily an indicator of a good Financial Planner, Adviser or Guru - whatever they choose to call themselves doesn’t really matter - the investment proposition should just be the engine that drives your overall financial plan and shouldn't have real correlation to how good the actual financial advice is.
Likewise, if your investment portfolio has taken a dip or a temporary decline, this is not your financial planner’s doing either. This is how markets work. They continuously soar and advance, with unplanned, unforeseen, temporary glitches along the way.
If you find yourself wanting to praise or scorn your financial planner for your investment returns, or even worse, you find that that is what they are marketing or bench-marking their services against, then you should run a mile. In that scenario your financial future would be in the hands of someone who ultimately is guessing and pretending they know what they’re doing.
They should never stock-pick, predict performance at a fine-granular level or go with a hunch… they should simply invest your family’s wealth in the one thing that has always stood the test of time.
Alfie Mullan, November 2019