Money Management

A Cautionary Tale for People with Financial Advisors, so That They Trust Their Instincts and Don’t Become Victims of Wealth Management Malpractice

When You Hire an Advisor, Don’t Check Your Vigilance at the Door

I used to run a couple billion.

Now that I’m retired I help people steward their wealth. I sometimes analyze their portfolios and teach them how to evaluate their investment advisors. Listen, there is some seriously funky stuff being done to your money.

I am no longer shocked by what I find in portfolios.

My friend had me review her IRA. She funded it with $5,000 on March 11, 2020, about halfway down the market’s COVID-induced swan dive. Her advisors did not invest it until July 29th. It sat in cash for 4 ½ months. She kept checking her account, wondering why it was still in cash while she was being charged a 1% management fee and earning $0.04 on her money each month.

I would have been fired on the spot for doing that as an institutional investor.

I can understand waiting a few days when the market is a falling knife or dollar-cost averaging (investing gradually). But do nothing for 4 ½ months?! Had her money been…