Should advisors have financial advisors?

Should advisors have financial advisors?

Should advisors have financial advisors?

 

But overall, Loyer finds that clients are reassured knowing that he manages his portfolio the same way he does for theirs: “It shows confidence and a lot of our clients will ask if our assets are the same way our client’s assets are, and we can say ‘they are managed 100% the same way’ because we have the same type of portfolio programme.”

Drew McIntosh, an advisor with BMO Nesbitt Burns in Calgary, has his own reasons for managing his own account.

“I believe that if an investor has their own skin in the game it speaks volumes to their clients that they have confidence in their own ability,” says McIntosh. “That being said, I tend to invest in things that are completely different than what I invest in for my clients, taking on a little more risk.”

Another important reason for his choice to self-manage, is that he can avoid regulatory red tape. “If I’m caught in a position where I need to liquidate something, according to IIROC regulations I would have to notify all of my clients that I were liquidating my position, even if I still believe in that position and want to continue holding it for a client.”

McIntosh also avoids investing in securities that BMO doesn’t cover or invest in. “If I’m caught in a position that I want to liquidate just for liquidity or to capitalize on gains, and all of a sudden our research department makes a recommendation, I would be restricted from selling it.

“I just go outside the box and invest for myself in things my firm doesn’t cover and in things that I wouldn’t invest in for my clients, that eliminates any conflict of interest.”

That said, McIntosh believes there could be an advantage to having someone else manage his money: “I think there would be some merit in having another advisor managing your money; It’s like the mechanic that drives the worst car, you’re always taking care of your clients so you fail to take care of yourself.”

 


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3 Comments
  • Craig 2013-07-08 11:15:48 AM
    I have been an advisor for 11 years and a CFP for 4 years. Would find it very strange giving advice to clients if I didn't "practice what you preach". I constantly get asked the question, do you manage your own funds. I'm sure some would walk away if the answer was NO.
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  • David 2013-07-08 1:28:50 PM
    I agree wholeheartedly with Craig. Perhaps having a 25 year old 'managing' high-net worth people and being paid a six-figure salary is the problem. At 25, I was too busy teaching classrooms with over 35 students for less than $20,000 a year.
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  • Izhak 2013-07-10 9:50:23 PM
    This is silly. Any financial advisor who cannot manage their own money should NOT be giving money advice to others.
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