My inbox often gets filled with new tools just for financial advisors. They all tout some new way to allow advisors to manage their clients accounts. There is Wealthscape by Fidelity, that allows for client rebalancing and portfolio management. How about Veo by TD Ameritrade, that, you guessed it, does client rebalancing and portfolio management. What about Morningstar’s ByAllAccounts? Yep, client portfolio management tools. It goes on and on.
So, while advisor’s are given tools to properly manage investments, what are individuals given? Stock picking and charting technologies, which are tools of a professional gambler, not an investor. Don’t get me wrong, they have their place, but they should not be the sole basis for making investing decisions.
Why is the software financial advisors use so different from what the individual gets?
Once again we need to look towards the brilliance of Wall Street marketing which states:
- Proper investing should only be done by a trained professional.
- Individuals should not attempt to properly manage their own portfolio, as it is too difficult and time consuming.
- Individuals should stick to “easy” things like researching stocks, and predicting and timing market movements via stock charting.
What is not said is…
- Proper investing is not that difficult. Most advisors only spend a small part of their time doing it anyway, as most of their time is spent finding new clients.
- If we gave individuals proper portfolio management tools to use, then they would not be inclined to pay out management fees year after year.
- Timing the markets, stock picking and charting is nearly impossible for even the best of the best investors.
Either way, as usual, Wall Street wins. Given charts and short term trading tools, individuals are encouraged to trade away. Unfortunately, most are not successful, and eventually give their money to a financial advisor that charges even more in fees.
Through our own personal frustration with this process, DIY.FUND was born. We believe individuals should have access to the same tools and techniques professionals have, so they can manage their own portfolios easily each and every day.
I was reading a blog post by a respected financial advisor. In essence he wrote that the optimal time to rebalance a portfolio, is not based on time, but based on when your holdings move outside of a set threshold amount. The downside with this approach is that it takes time to monitor one’s portfolio to do this. But fear not he stated, advisors have advanced software so they can stay on top of their clients accounts and rebalance as needed. Yuck. A better solution, gives the individual access to the same advanced software advisors use, so they can do it themselves and cut out the middle man.
Learn how we are changing personal investing. It’s free! www.DIY.FUND
