When you invest your money, you are looking for a positive return. In the majority of cases, you get a positive return. That’s the way the markets work. Prior to investing your money, you want the best return possible subject to the risk you are prepared to take. That is a normal objective.
In other words, your focus is on the return on your money. One day, you’ll want your money back.
In the world of wealth management, their focus is not the same. Their focus is on managing your money.
You and your wealth manager do not want the same things.
Simply, most wealth managers charge a fee based on all of your money invested. It matters little if they make a big return or little return, they still get paid. As the markets rise upwards on average, the chances of you losing money are slight. Of course, if you did, you would inevitably take action. This means you live with the conflict. By accepting that your wealth increases over time under market conditions, you get what you want….an increased return. The wealth managers get what they want, fees on your money. Yet, do you ever challenge your original objective? How to get the best return based on your risk? Such analysis tends to be forgotten.
It pays from time to time to shake things up. If you don’t, the wealth manager’s goals will supersede yours!