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Some Consultants Emphatically Say … No!
By Staff Reporters
Nope! So says Andre’ Cappon, Guy Manual, Stephan Mignot and Seth Varnhagen of the CBM Group, Inc; a consulting firm in Manhattan, New York. In fact, while writing in Registered Rep – a trade magazine for FAs in September 2009 – they estimate that long-term real (adjusted for inflation), actual (after taxes, fees and market timing) returns for the average retail investor, to be around 0 percent. That’s right; not the 8-12 percent usually attributed to long term investing trends.
Or; do you simply have the wrong type of Financial Advisor [FA]?
Visit: www.CertifiedMedicalPlanner.com Do you need a fiduciary advisor? Who really knows for sure?
About the CBM Group
Founded in 1992, the CBM Group is a general management consulting firm specialized in the financial services industry. Their goal is to help leading financial institutions, and their financial advisors, create and sustain the competitive advantages necessary to thrive in the global marketplace.
Link: www.theCBMGroup.com
Assessment
Despite the math, and numerics like Ibbotson charts showing impressive long-term gains, on average retail investors — like doctors, medical professionals and ME-P readers — have made very little actual return on their savings; according to CMB.
Link: http://registeredrep.com/advisorland/marketing_selling/0901-small-investment-return/index.html
Conclusion
And so, your thoughts and comments on this Medical Executive-Post are appreciated. Does your FA add value to his/her fees of 1-3%; or are they a drag on your portfolio’s performance. Ever consider “doing it yourself” like some medical institutions www.HealthcareFinancials.com
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Filed under: CMP Program, Financial Planning, Investing, Portfolio Management, Recommended Books | Tagged: Andre’ Cappon, CBM Group Inc, CFP, CMP, fiduciary advisory, financial advisors, Guy Manual, Ibbotson, registered representative, Seth Varnhagen, Stephan Mignot, www.certifiedmedicalplanner.com |
The Leading Business Education Network for Doctors, Financial Advisors and Health Industry Consultants 
Throwing Down the Gauntlet!
As a former licensed insurance agent, stock-broker and registered-rep, certified financial planner, registered investment advisor and founding CEO of: http://www.CertifiedMedicalPlanner.com; would any of our esteemed ME-P readers like to challenge this report?
Or; are we – and our clients – to assume it is correct?
Fraternally
David
Dr. David Edward Marcinko; MBA
[Publisher-in-Chief]
http://www.HealthcareFinancials.com
Certified Medical Planner™
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No … No!
Financial Advisors are in a state of gain and … gain. They have nothing to lose anyway becasue it’s our money. If their strategy works, they get a good commission or percentage. But, if they fail, they have less to lose and we have to handle the far bigger loss.
Srinivas
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I would agree with the findings of the study. There are quite a few other studies on the same subject that show similar results.
A strong case in point is the performance of active mutual fund managers. The results show that these managers in general cannot even make up the cost of the load and under-perform most other passive funds. That is, they under-perform the market by about the size of the load – their negative alpha against their touted ability to provide positive alphas. In a way, that is like saying that you pay the load on the fund to a manager so you can lose the money. You can do the same for free by just buying into the index.
There is a caveat though – that there is a handful of advisors (unfortunately for the investing population at large, too small a minority) who can and do provide value. In even weakly efficient markets, advisors can perform two important tasks: to create and structure suitable portfolios that well reflect the risk-return preferences of individuals; and that these portfolios are tax efficient. Doing just so would add value. It does require competency though.
I would also recommend one chapter from Burton Malkiel’s classic book “A Random Walk Down Wall Street” in which he discusses the topic: “How Good is Fundamental Analysis”? It is a fairly moderate view of analysts, but even that is very damning.
Professor Somnath Basu
Director, California Institute of Finance
California Lutheran University
Ph: +1 805 493 3980
http://www.clunet.edu/cif
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After just finishing two books by Nassim Taleb, who claims that economists and investment managers are usually useless, I am certainly skeptical. My advice to anyone is to at least get full service for what you pay – some advisors/firms include valuable advisory services in the price of investment management – financial planning, tax advice, estate planning, trust services, asset protection, insurance, mortgage, etc. The coordination of such services is quite valuable but would never be shown by an investment return study.
Ed Morrow III
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Hi Ed,
Well said, and thanks for commenting.
The distinction between investment advisors, brokers, RRs and wealth managers, with holistic financial planning, is often overlooked. Hence, the aim of our http://www.CertifiedMedicalPlanner.com educational program integrating financial planning and medical practice management for those in the healthcare advisory and consulting space.
Best.
Ann Miller; RN, MHA
[Executive Director]
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From an Industry Insider Magazine
The retail grass-root foot soldiers of Wall Street, including thousands of so-called financial advisors [FAs], seem deeply ambivalent about how closely lawmakers should listen to their industry’s own leaders.
http://www.fa-mag.com/fa-news/5167-advisors-wary-of-wall-streets-leaders.html
So, lemme get this straight. If the salesmen don’t trust Wall Street, how are the doctors supposed to trust the salesmen?
Carlton
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