Investment Advice

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A recent conversation with friends drifted to discussion of investment matters. One friend was relating some advice they’d received from a broker, which to me sounded like absolute crap – and I said so.
Am I an investment expert? No, but I did work in the industry long enough to meet quite a few shysters whose personal investment strategy amounted to expensive cars and toys to fill up their home. Most brokers’ long-term plans extend to having a bigger house and a bigger car, which isn’t really an investment strategy at all. There’s nothing wrong with expensive houses and cars per se, but if you don’t have a strategy for paying for them, it’s just a bigger debt than you had before.
My opinion begged the question, how do you choose an investment advisor that will actually be worth the advice they are giving? At the time of the question, I was a few drinks into the evening and not thinking as clearly as I should have been. Today, while driving back from my afternoon coffee run, the answer hit me, ringing as obviously simple as it did the first time I heard it several year’s back during a college stint at Toad Valley Golf Course.
A retired broker, who acted as a starter for the golf course part time, had an incredibly bright outlook on the subject. Ask your broker or investment advisor what their own personal net worth is. Then ask them what they are currently investing their own money in. If they aren’t willing to answer those two questions don’t bother working with them; it’s that simple. A person who isn’t willing to share their personal investment strategy with you shouldn’t be giving investment advice; that would be like me giving computer advice, without owning a computer.
Obviously, there’s a little more to it than just their willingness to disclose what they own and do. You should ascertain that the advisor’s investment objectives are either similar to your own or at the very least, he/she understands your personal investment objectives.

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