Memoirs of a Financial Advisor

Having been a financial advisor for an extended period, I think back on some of the situations that continue to stand out as some of my most memorable experiences.

Financial Advice Clients

One of the classics was a gentleman who peppered me with questions, many of which were aimed at unearthing the great secrets that some of the more naïve folks actually believe we have. He was extraordinarily enthusiastic, professed a great interest in having me assist him, and announced that we would be speaking every day. I'm quite sure you can guess my response, but it wasn't: "Let's get started." (For more from this author, see: Finding the Right Financial Advisor Is Important.)

I suppose there are still people who believe those of us in the investment community have special knowledge about how Wall Street works and have magical ability to make good things happen. And so it was that another gentleman client called me to complain that I had lost $70,000 of his money in the latest month.  That was a drop of 10% during a month when the Dow dropped 15%. Like many others, his view is that advisors should always outperform on the way up and never lose a penny on the way down.

A few years ago, I had a client couple who claimed to be quite savvy about the ways of the market. Indeed, they told me that part of their activity was options trading. I found that interesting and asked for the details. Not surprisingly, there was no response. Sometime later, I received a panic call from one of them asking why their Japanese investment had dropped by 10%. I explained that there had been a 10% stock dividend, which meant that they now had 10% more shares.  At the other end of the phone, I heard: "Oh!"

During the dark days of 2008-2009, I met with a builder who came in to discuss the sorry state of his business. He had no projects under way, a stack of bills and the only funds he had were in his retirement account. It was an extremely difficult time for many folks, so I offered to assist him at no charge. He folded his arms and said he'd have to think about that. How sad.

Back in what felt like the good old days of the late 1990s, I met with a couple who drove up independently in a pair of recent vintage Mercedes. My first impression was that of a prosperous pair who needed a bit of financial fine tuning, but it turned out that their net worth of $200,000 was the sum total of what they hoped would take care of them during the retirement that was to begin in the next few years. I try to be helpful, but pulling rabbits out of hats is not in my repertoire. (For more from this author, see: Financial Planning Asks, Will You Have Enough Money?)

Investment Professionals

The situation is much the same with investment professionals. Some eight years ago while serving on the investment committee of a local nonprofit, I and two others were invited to lunch by two stockbrokers who were interested in getting our organization's account. I showed up in casual clothes, rather than mimicking their pin stripes. They began with a discussion of the performance of different asset classes and presented an Ibbotson chart of asset class returns over the years. When I asked about their participation in the BRICs, they shrugged and said "we don't go there." The BRICs are Brazil, Russia, India and China, which represent nearly half of the people on the planet. As you can guess, we did not engage their help.

Then there was the young female broker at a Boston office of Merrill Lynch who handled the transactional side of an account I was managing for a company in Western Massachusetts. After calling in trades one day, I followed up the next day for confirmation of the trades and was told they didn't get done because "Marcie wasn't feeling well."

I recall an interesting presentation by a stockbroker who was explaining the difference between load and no-load funds. Load, as most of us know, is another word for sales charge. But this creative fellow described the difference as help or no help.

Most embarrassing for me was a large meeting of analysts at a major Toledo, Ohio auto parts producer. We began with a full-morning session and then broke for lunch. When I got up, however, the fellow behind me said: "You're air conditioned." My trousers had somehow split down the middle. The good news is that one of the corporate officers was kind enough to drive me to a men's store to find a replacement.

As an analyst in the 1980s, I traveled a lot meeting with corporate executives, going through manufacturing facilities and learning about new products. But there were analyst trips that were hardly in-depth company studies. I remember a trip to Puerto Rico, which began with a tennis tournament and then moved on to join the company's chairman on board a large motor yacht he had chartered. Our group of six came aboard, had a few rounds, and continued the discussion in the water along with a group of corporate executives.

I learned a lot from these adventures, look forward to sharing worthwhile advice, and enjoy helping investors move intelligently toward their goals. (For more from this author, see: A Look Beyond the Stock Market Reactions to Trump.)