...Josh wrote about being boring (keeping things simple), and that’s good guidance. Every day – yes, every single day – we get cold emails or a cold call here at the office from some investment firm pitching us on the merits of “alternative investments” or “structured products” for our clients. Alternative investments (aside from the boring stocks, bonds and ETF’s) are often pretty complicated.
And while improvements happen every day in the industry, I will admit I have felt so badly burned by some exotic strategies in my past life as a broker, in good conscience I can’t talk seriously about a client owning them.
In my opinion, more than ninety percent of the investing public can do just fine without alternatives and structured products. Perhaps ninety-five percent of the public can get along without these complicated schemes. Yet, at the office, we get approached every single day.
“Hey, I’m going to be in your area on Tuesday. can I swing by for fifteen minutes to talk about alternative investments?”
“Next week I’ll be seeing other advisors near your office discussing a new structured product, can I stop over and show you the benefits of investing in them for your clients?”
We used to politely decline these calls. And I used to not respond to their email requests. Then I started marking their emails as junk and deleting them from my inbox. But they persist. Think about that, why would they persist in trying to move the product? What is in it for them? Now I tell them on the phone (or write back) “we are simply not a good prospect for you.”
Why? Their products are inappropriate for most individual investors. These products carry high fees, they often do not behave the way we expect them to act and they are not always liquid.
But more than anything else, they are hard to explain.
Read more at https://mullooly.net/boring-is-good/13004
And while improvements happen every day in the industry, I will admit I have felt so badly burned by some exotic strategies in my past life as a broker, in good conscience I can’t talk seriously about a client owning them.
In my opinion, more than ninety percent of the investing public can do just fine without alternatives and structured products. Perhaps ninety-five percent of the public can get along without these complicated schemes. Yet, at the office, we get approached every single day.
“Hey, I’m going to be in your area on Tuesday. can I swing by for fifteen minutes to talk about alternative investments?”
“Next week I’ll be seeing other advisors near your office discussing a new structured product, can I stop over and show you the benefits of investing in them for your clients?”
We used to politely decline these calls. And I used to not respond to their email requests. Then I started marking their emails as junk and deleting them from my inbox. But they persist. Think about that, why would they persist in trying to move the product? What is in it for them? Now I tell them on the phone (or write back) “we are simply not a good prospect for you.”
Why? Their products are inappropriate for most individual investors. These products carry high fees, they often do not behave the way we expect them to act and they are not always liquid.
But more than anything else, they are hard to explain.
Read more at https://mullooly.net/boring-is-good/13004
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