Jeff and I made a call this week that I found very interesting on several levels, so I thought I would share some of my thoughts. We called a gentleman, he was referred to the firm. Immediately, he put his cards on the table, which I appreciated – his words were, “I’m very happy with my guy at XYZ firm.” My first thought was, “What does that mean?” For me, I’m “happy” when I am playing golf, I’m “happy” when I’m on a river cruise, I’m “happy” when my kids excel at their jobs… 

Is being “happy” with your financial advisor one of the sacred cows that we carry around with us that says, “Don’t confuse me with the facts because my mind is already made up?” No one makes mistakes deliberately, but we also validate and justify our decisions time and time again. No one is stupid on purpose, however we see people repeatedly make mistakes with their money. A simple case in point – many Americans get tax refunds year after year. They have either convinced themselves that it is a good financial move or they have not thought about it at all, both of which are not optimal.

People accept the “fact” that their guy has their best interest at heart. If you saw some of the things that we have seen in the name of “your best interest” you would cry. In reality, the majority of advisors are not required to act in your best interest. People accept the “fact” that their guy is qualified because he passed a test. People accept the “fact” that their portfolios are labeled correctly; they are conservative investors so they assume their portfolio mirrors that sentiment. Again, we could write a book on people’s reality not matching what is in their portfolio. 

Back to the call. Jeff indicated that if he was “happy with his guy” that it would not be prudent for him to engage us because we might confuse the situation with a different strategy, so we tried to back out gracefully. Then, all of a sudden, the gentleman wanted to know more about how we operated. Which is when Jeff inquired about his portfolio, what is in it, and why. Then Jeff asked, “Given that you are a conservative investor why are you so heavily invested in equities?” (Wow, if we could see through the phone I think we would have seen his brain explode).

Needless to say, I have no idea what it means to be “happy with my guy,” but I do know in this case he probably should not be.

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