So I was speaking with my financial advisor about an account. I expressed an interest in moving out of the current mutual fund and into a more risky asset class with a more cost efficient investment strategy.
Here’s what I can piece together a snippet of that discussion:
Me: “I’d like to move out of the current strategy. I’m more interested in small caps, real estate and frontier/emerging markets. I’d be happy with an ETF or a mutual fund provided that the fees are low. Would you mind sending me a few suggestions?”
Advisor: “So, if I understand correctly, you’d like something more aggressive?”
Me: “Yes, aggressive–that’s it. I’m comfortable taking on more risk.”
Advisor: “Well then, I can take care of that for you. If it’s okay for you, give me the go ahead and I’ll provide you with a trade confirmation.”
Me (quite surprised): “No, that’s not necessary. I’d like to decide or at least sign off on where my money’s going. If it’s too much trouble for you to put together a proposal, I can do the research and make the selection myself.”
There are no gaps in this transcript–in a few short exchanges (admittedly after exchanging initial pleasantries) the conversation veered into action mode — the advisor had jumped the gun and was ready to trade, no questions asked. It just felt so wrong.
I had asked for a few suggestions and the advisor offers to move my money into new products without telling me upfront which ones he’d select. I’d been fairly specific about which asset classes I’d consider and wanted have the advisor’s opinion. But the advisor’s WAY ahead of the game–ready to send me the trade confirmation –deal done, game over– without any hint as to what will be in the new portfolio. No indication of the asset class(es), which asset manager(s), ETF vs. mutual fund, active vs. passive strategy or total expense ratio.
Is this really how advisors provide advice these days?