9 June 2015
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I love what I do.
Did you decide to read this because you agreed with the title? Are you looking for reasons to affirm this belief? If so please stop reading. I am proud of what I do and how I help people, and I want to invite you into my world so that you might just leave with a slightly altered opinion of who I am and what I do.
Over the years that I’ve been in this business, when I talk about what I do, the more bold and direct people tend to ask the question:
“Does that mean you lie for a living?”
And those that don’t are often thinking it. It is often said tongue in cheek, but unfortunately its the symptom of a legacy impression and expectation that exists at large, that has passed on through the years.
But rather than run away from this question, I embrace it. I’m a big boy and I don’t shy away from a healthy debate. Usually I only have a short time to explain how things are different now. So when my company, CSS Investments, told me that we were starting a blog, the first thing that I thought was that it’s a great opportunity for me to put some serious thought and reflection into this issue, and flesh out a well-considered answer to this question that many people think, but may be afraid to ask.
Then I got carried away! I ended up writing much more than I expected to as the message I want to spread comes from such a deep, passionate belief that I am here to help people. So it is split into a two part series. It is the result of some serious soul searching, research and desire to help you understand what the modern stockbroker is, and offer you some advice on what to look out for and what to avoid if you are considering investing with a professional.
My aim is simple. If I can help just one person to avoid making a bad decision, whether that is avoiding an unsuitable provider, or even not investing due to a fear of the unknown, then the time taken over this will have been worth it.
I hope you enjoy this first part!
I am fascinated by the markets, how they work, what makes them move and how they can affect returns in a portfolio. I get to talk to great people every day and help them understand the world I live in, guide them through it and have a direct impact on their financial future. I consider myself very lucky and privileged to do this every day.
There are downsides, like with every job or profession. Sometimes my clients lose money on a particular investment or trade. The markets may go against my original idea. Sometimes nothing much happens at all. I can accept these as this is the reality of operating in the stock market.
However there is one thing that I find difficult to accept to this day, and that is when I’m questioned on the value of what I do. What is the real value of my advice?
I still come up against the old stereotype that is still widely held amongst the public. This view is that stockbrokers are greedy, dishonest, generally bad people. They are fast talking, sharp dressed villains that people love to hate. Films such as ‘Wolf of Wall Street’ help to keep this alive, but today’s reality could not be further from the world view portrayed in these Hollywood movies.
I’m not saying that this is made up. It is fair to a point, as some of those that came before me in this industry certainly fit this profile.
But things have moved on.
My firm is strictly regulated by the Financial Conduct Authority (FCA) and everything I do is scrutinised to protect the client. I can’t lie or be dishonest, or I’m out of a job. I act in the best interest of each client based on their circumstances and what they have specifically told me they are looking to achieve.
I don’t ‘fly by the seat of my pants’, buying and selling stocks or shares on a gut feel moment to moment, shouting across a crowded room. The only way to be successful in this industry is to take a measured and strategic long-term view on the markets, and back this up with experience and knowledge of what is happening today, as well as applying lessons from the past. Even if you are following a shorter-term strategy, the importance of understanding the longer-term and wider economic conditions should not be underestimated.
I don’t expect you to feel sorry for me here, that is not my intention for writing this. As I said, I love what I do. The reason this is frustrating is because I see that this false belief and bias holds people back from making the most of their investments and financial future.
I have spoken with hundreds of private investors over the years who have told me of their successes and failures, their expectations and objectives and how difficult these can be to achieve. I hear stories of big wins and bigger losses. Of the one that got away. Of how they would be much better off if they had time to fully focus. Of how a mistake cost them big time.
Most heart breaking of all are the ones who tell me that they lost everything because they didn’t really know what they were doing. And I can’t tell you how much my blood boils when I hear that they have lost their investment pot to a dishonest or incompetent advisor. It’s these people that have killed the trust. This is what I am trying to win back, little by little, client by client, every day.
Simple. It’s because if you care about your financial future, I implore you to ignore this stereotypical view, and instead look at the value you could realise instead.
Irresponsible bankers and unethical marketing, combined with a media backlash continues to tarnish the reputation of financial services. But I’m not a banker. The firm I work for is a small, privately owned business. I leave my family at 5:30am and see them again at around 7:30pm. I work hard for my clients and I’m committed to them. I make a good living doing this, but I do it because I love it and feel that it’s my responsibility to help show as many people as I can that it is possible to reach their investment goals with a structured and disciplined approach.
I believe this to my core.
Good investment advice must always be individual to you.
Good investment advice encourages you to make a plan and helps you be better prepared for what the market throws at you.
Good investment advice helps you understand your personal investment objectives and how they fit into the wider economy and financial setting.
There are advisory investment services out there that base their model on being impersonal, treating their clients with a ‘one size fits all’ approach. They fulfil regulatory requirements on suitability by adhering to the process of assessing a client and their situation, which mainly works for the advisor and the firm as it allows them to use technology that automates their processes.
This means blanket recommendations, not deeply understanding your objectives and goals, and rarely will you ever get to meet the person advising you in the flesh. This approach may work for you, so I’m not saying this is totally wrong, it will come down to how you like to interact with an advisor and firm, and the objectives that you have for your investments. It’s always an individual decision on what will work for you.
The problem with this approach is that if you don’t have an above average level of understanding of investing, then it doesn’t always work for the client. It’s not specific to you. It doesn’t build a relationship or trust.
And that’s not valuable.
So what is?
Find out in part two in this series, which will be published next week. Nothing like a cliff hanger…
What do you think about what I have said so far?
Have you had any experiences in this area that you can share that could help others?
Are there any questions can I answer of yours?
Sound off in the comments below!