My First Financial Advisor
My First Financial Advisor
I usually simplify things here on the blog. Sometimes it is easier to glaze over a part of the story instead of pulling out all the details. Others, the point is clearer when not bogged down by tangentially related details. What’s lost in nuance, however, often adds shades of complexity to the picture. Occasionally another viewpoint is suppressed on purpose. I have frequently referred to the fact that I fired my financial advisor. In the simple math of investing, his returns were slightly sub par. But it may interest you to know that he was my second. My first financial advisor, like my father, died tragically from an unexpected brain hemorrhage.
I will never forget him.
Rest In Peace
I could feel the energy of the crowd tense as the room collectively leaned in. After his wife and parents had spoken, his brother opened up the mic to the crowd. The momentary stillness was broken by a crowd of people who decided to step towards the lectern
And the stories poured out from his devoted clients.
The story of the poor widow who left with no financial knowledge was lucky enough to find him.
The businessman who he helped liquidate his stocks to put a down-payment on the first restaurant. His client now owned ten.
The man who lost his father but struggled to navigate the last wishes to have his ashes dispersed in a small town in India. And how he signed off and became unreachable for two weeks, and traveled to India with his grieving client to negotiate that which must be done.
A room full of memories.
There were so many things my first financial advisor got right.
Building a Business
Unlike most advisors who collect an AUM fee, my first financial advisor was strangely unafraid to help his clients pursue businesses and profits outside of the stock market. He was one of the great supporters of my time as an art mogul, and looked for ways for me to introduce my business to his clientele.
Furthermore, he encouraged me in the building of my medical practice. He often helped me sort through the benefits and costs of real estate ownership.
He pursued several businesses outside of the financial advisory field himself and was happy to share his experiences to instruct.
A True Advisor
My first financial advisor often felt like, to me, a trusted physician, lawyer, or accountant. He was a friend, a teacher, a safe dry place in the midst of a storm.
He asked question after question. He was intimately up to date with the comings and goings of my loved ones. He inquired about the children, he asked after my parents. You could tell that not only was he being cordial, but he was gathering information to help build a solid financial foundation for my fledgling family.
He was never content to dictate. He came to meetings with hands full of books and articles. Tidbits that he thought I could learn from. Perspectives that he had found valuable.
He was ever the student and teacher at the same time.
A Shield
He felt my pain during the recession. Weeks before his death, he had lowered his AUM fee in light of poor returns. He didn’t have to do this. No one was doing well. But he personally felt it was his job to protect his client’s assets, and he didn’t want his fees to be yet another drain.
It is profoundly sad that he died in the middle of the economic downturn. He never got to see his long-term planning pay off.
He left a community of people who will never recover from his loss. Not because of his financial advising (he had a good succession plan in place) but because the world has so few people that are as special.
I was spoiled.
Final Thoughts
My first financial advisor was an advisor in all sense of the word. He was also a great friend. A decade later, I still feel his loss every day. Even though he never brought returns better than the market, his advisory services went well beyond the amount of money accumulating in my accounts.
Although rarely referenced on this blog, there is a real place for financial advisors in the world and in our community.
Every time I forget that, I think of my first financial advisor. My Cheerleader. My buddy.
May he rest in peace.
Awesome tribute Doc, sorry for your loss but he set you up well.
He really did. I’m not completely anti-advisor.
Thank you for sharing your story, I am deeply sorry for your loss.
I can relate on so many points, but will focus on him being more than a financial advisor. When you find that person who goes above and beyond the commission and fees, they are your advisor/friend/family member for life.
I can’t imagine going one month without speaking to my advisor. He makes my financial life less stressful and keeps me walking the line when it comes to things I never would have even contemplated. At the same time, I can’t help but gloat about how great my experience has been and am constantly referring people.
Here is to all the financial advisors out there who walk us through the gates of hell and then some!
Totally. There are some good ones out there. It’s just a matter of finding them.
Man, that’s tragic. Glad that you had the opportunity to know him, but how profoundly sad that he never got to see the fruits of his labor in many ways.
There are some good advisors out there, but they are rare. Hence my blog post yesterday.
It sounds like your first advisor really helped prepare you to do it yourself at some point if he was bringing articles and discussion to the table. I wonder if that had anything to do with the comfort you had to drop the second advisor when you did?
TPP
It might have. I think he taught me that this stuff was knowable to the novice with a little bit of studying.
Its very refreshing to hear about a financial advisor who actually was, what they all claim they are. We tend to be hard on financial advisors in the FIRE community (often its justified), but its nice to be reminded from time to time, that there are good ones who can provide value and who are dedicated to actually serving their clients.
-Ray
There are some.
Your first advisor and friend , sounds like a wonderful man. He definitely left his mark in the world.
On one level with his financial guidance . On another level with the mark he left on your heart. And for sure, many others. Thank you for sharing .
He was a remarkable guy.
It’s really neat that you had a trusted advisor whose advisory services went well beyond the amount of money accumulating in my accounts. That’s a rare commodity these days. I feel like most advisors pretend to be your friend only to sell financial products or to take their share of your hard-earned wealth through AUM. Not your first financial advisor. In fact, his lowering of AUM during the economic downturn went way beyond the call of duty of a fiduciary relationship! Sorry to hear that you lose a trusted friend.
Ehile I think it is a rare commodity, I hope that changes.
I’m sorry for you loss. It sounds like his approach to financial life had a huge impact on your financial future. I think the FIRE community is terribly prejudiced against advice. I routinely see jokers one or two years out of school blowing on and on about AUM cost while they are $500K in debt. I see physicians selling courses (advice) that have no real vetting. It’s just someone’s opinion. It’s no different than Trade Like Chuck, or those pony tail dudes on CNBC who want to convince you to trade options. The FIRE community is full of “experts” all echoing each other’s echo, and really don’t understand what they are talking about. Each ‘expert” is hawking a blog sure to add to his net worth, not yours. These “experts” don’t have the first clue about things like diversity and asset allocation and risk analysis, but have NO PROBLEM putting your money at risk with their often bad advice. Everyone of their blogs sports a disclaimer that their advice is for entertainment. Everyone of these blogo advisers, will then blow with made up statistics about real advisers. Why thos bastards charge 1%!!! The reason they charge 1% is related to portfolio size. It’s not worth signing on a 1M portfolio. You get to 2M the charge drops to 0.5%. You get to 4 or 5M and you’re typically down to .3 or .25%. So the 1% rap is just a lie, and you either have enough to afford advice or you don’t.
I have an adviser and for sure he’s made me more than the .3% he charges me by a lot. Through him I can access institutional grade funds, funds that cost 10M minimum to get into. These funds are optimized. They have the tilts like value and cap size that add free money to the bottom line. They are not traded or churned like retail funds or ETF’s which adds overhead to the ETF. They have optimized trading rules which use observed momentum effects to shave points and make more money. You don’t get that at Vanguard or FIDO.
I’m 66 my wife is considerably younger. If I die who is going to help her manage her fortune? Bogelheads? The echo chamber? My adviser has things in hand. He knows how I think, how much risk I’m willing to take, and won’t let something stupid happen. You get what you pay for. No one would think of leaving their home uninsured yet they leave their fortune to a bunch of swinging peckers with blogs. It’s ridiculous. I did a recent analysis on xrayvsn’s blog looking at portfolio longevity v SORR. I analyzed a 60/40 which was on the efficient frontier and a Bogelhead 3 which is not close to the efficient frontier. The Bogelhead 3 did much worse when placed under stress, yet how many bloggers quote the Bogelhead 3 as man’s best portfolio? Arrogance won’t save your patootie when your old and out of money because you chose an inferior portfolio. Listening to blogoland isn’t much better than listening to the Urologist in the Dr’s lounge hawk some penny stock.
Now strike up the band “why those bastards charge 1% they could wind up costing you millions of dollars”. Of course investing in a sub par poorly tuned portfolio could cost you millions more. The Bogelhead 3 will get you going. It’s not terrible, but it’s far from optimized. Putting money away monthly will get you going. Investing in pretax accounts will get you going. These mean you’re a pretty good novice investor. Nothing more. A closed mind will doom you to remaining a novice.
You bring up valid points and I am glad you provided the counterweight to traditional FI blogger rhetoric.
Would love to know your advisor’s name and contact info.
Unfortunately the one in this story died. But if you would like to hear some great advisors listen to my most recent podcast episode.
https://diversefi.com/2019/02/18/whats-up-next-podcast-episode-18/