“Check everything, make sure the people advising you are regulated,” Bellamy added.
“If they are not regulated, it’s the wild west. Get your stuff audited by independent people, the equivalent of getting a second opinion.”
These are the words of Craig Bellamy. Burnley assistant manager and former Wales captain Craig Bellamy has said he is bankrupt. You can read the story here.
However, who do you ask for a second opinion? It seems from the news that Bellamy did not benefit from regulated advice. As such, it would make sense to get a second opinion from someone who is regulated. How many people ever check if their adviser is regulated? Did you?
Thankfully, these stories of bankruptcy are not everyday occurrences. Most people do get regulated advice. However the issue is not a second opinion to check if you are getting regulated advice, it is whether the advice is good enough.
Let’s imagine you start with £1m. Over 20 years, based on your risk and personal circumstances, your £1m investment could have accumulated to£6.7m. Instead, it ended up at £2.65m. That’s over £4m difference you have lost. What if Bellamy’s story was ” Bellamy, ex-professional footballer lost £4m over the last 20 years from poor investment returns”
What about “Bellamy, ex-professional footballer lost £4m over the last 20 years due to higher than average costs? “
It is news when a public persona has been made bankrupt. It is not news if the majority of non-public personas lose out.
Would you prefer £6.7 m or £2.65m? It’s a no-brainer decision.
Thousands and thousands of investors fail to get their investments checked. In the example above the difference is a 5% v 10% return. Even a 2% difference would mean ending up with £4.6m rather than £2.65. The numbers are big numbers and will change your lifestyle.
You may be lucky enough to have the perfect portfolio and a second opinion fully endorses what you are doing; that would be a great vote of confidence. Yet, most people have far from perfect portfolios, so a second opinion always makes sense.
But who do you ask?
If you invest with a national wealth manager and ask another national wealth manager to provide a second opinion….forget it. That’s not the type of second opinion you want.
Instead, you need someone impartial and without investment bias.
Welcome to The Wealth Coach