Of Discipline and investment advisory

In a recent training for Financial Advisors, 8 out of 10 participants admit that they only meet up with client once a year.
The rationale given is that they definitely will meet up adhoc when market is down, which discharges their duty better than meeting regularly.

In fact I would say most clients agree with this:

  1. Half of clients agreeing because they are passive about their investments. They don’t care much what happens in between as long as the annual report says their investment is growing.
  2. The other half of clients agreeing because they are closet market-timers and like it when advisors meet them to take advantage of market downs.

One of the more consistent messages from top performing advisors however goes against this grain. According to them, discipline and consistency is more important.
One thing for them is that meeting IR-REGULARLY and/or ERRATICALLY will unconsciously promote the idea that:

  1. Investing is a passive and unimportant affair to ordinary people, whereas it is the singular most important thing for their financial freedom and life planning process.
  2. Investing is a highly tactical and market timing affair, which will create the idea that investment is a highly volatile speculation, not a stable science.

That is why we insist on meeting every 3 months, sometimes it is for advisors own benefit, disciplining ourselves, making investing habitual. It is also to have less issues with clients, as they become accustomed to having investment discussions as a fun subject, rather than as dry painful annual visit to doctor or nervous system overwhelming adhoc market down events.

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