9 November 2010

Are you a client or a customer?

The question at first may appear to be irrelevant but think again. If your financial adviser treats you as a clients he should have your interests at heart, if he treats you as a customer he probably will have more interest in his commission than in the performance of your investments. What lesson can you learn from this distinction? First of all, make sure that the financial incentives for your advisers are aligned with your own interests. Then beware of all 'products' that advisers try to sell to you. It is always better to measure the value of advice on a 'holistic' basis and be wary of piecemeal advice that comes in dibs and drabs and were the advisers are not responsible for the overall performance of your portfolio.