The Secret Your Friends Did Not Tell You

Yes, that is right your friends have been holding out on you. They have a dirty little secret that would surely make life easier for you if they would only have shared this simple fact. However, if they shared it with you, it would no longer be their little secret.

I know this secret and will gladly pass it along ready to you. If you do one simple thing for me, act on it. Don’t fritter it away. Do something today!

So if you are ready, here is their secret:

They aren’t very good at finding investment advisors either. Now don’t you feel better?

They hedge their bets by hiring more than one investment advisor. That’s right….they hire more than one advisor.

You are probably saying to yourself right now, why didn’t I think of that? The simple plain truth is it’s hard to find good help and hiring multiple advisors makes life simpler in so many ways. Think about it! 

  1. You get the chance to diversify not just your portfolio, but the risk your advisor’s strategy may underperform in the current market;
  2. You get an opportunity to diversify by investment strategy. Please don’t make the mistake of hiring two advisors that invest the same way;
  3. You get two times the market insight for the same money;
  4. You get competition among your hired help and this is never a bad thing;
  5. Finally, you get peace of mind over your investment advisor decision. Certainly you cannot go zero for two? What are the odds?

Of course, there are some simple rules to following this secret. First, you really need to have enough investment assets to make having an advisor worth doing in the first place. The bare minimum investment assets would probably be $200,000, so you end up with no less than $100,000 per advisor.

Second, make sure that the advisors do not manage money in the same manner. Otherwise you will just end up with two times the same results and none of the benefits outlined above.

Finally, some advisors have fee breakpoints. Make sure you are not hurting yourself when diversifying between two managers. In other words, if you cannot justify the added cost with a potential improvement in investment results, solutions or service, don’t follow your friend’s lead.

However for most of the affluent population, this little secret saves a whole lot of wear and tear on the old body and will help you sleep better at night too.

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