Deflecting Bullets

An older, wiser adviser once told me “they pay you too much when times are good, and too little when things are bad.”

That’s the thing about walking on Wall Street; it’s consistently inconsistent. The ball is always moving. Half truths are instant gospel. And everyone is right & wrong from minute to minute. Is that audacious mendacity? I’m just thinking out loud.

When people don’t take my advice, sometimes they do win. {What? How’s that? Say that again…} Yep, it happens. Alot more often with other advisors. Probably less with others.

Yep, I’ll tell you to sell something because a trend is broken or a target is reached, or you need money & I picked that one… the one that went up still. And I’ll hear about it whenever something else is down.

We’re supposed to have read that great article on page 5 of the business section in the LA Times about GE. And when I say I didn’t, I can actually feel the shock & disgust oozing through the phone. The disappointment…

We’re supposed to know about every single product being advertised & whether the new one is better than the one we have. We’re supposed to be compared to every portfolio at your friends’ next cocktail party. And when we’re at parties, people pretty much wilt, run away, or scour us for free advice whenever we tell them what we do for a living.

You are Powerless, So are We

I don’t have a magic bullet or crystal ball, but somehow I’m still supposed to know. Even though you know I don’t know, you still have it in your head that I do (or else why are you paying me). And this irrational double talk in your head only shows it’s face when your greed or fear kick into overdrive. You know, the time you are least logical for us to talk about your money.

Your Advisor lives in the same powerless world as you.

Did I know the market would rally that day, when Obama shot Osama? Tasteless? Probably. Silly? Definitely. But did I know the market would rally? No. Neither did your broker. That’s the super secret stuff. The top 1% of the 1%. I am not them. Neither are you. Neither is your Broker. Neither is 75% of the stuff in your portfolio.

Is it smart for us to have this much cash? It was on the day the earthquake hit Japan. It was today. And in general- I think so, but who really knows. I told you what was possible with the allocation when I suggested it. Today I look smart. Tomorrow I might look like an idiot.

“We should have sold 7 weeks ago, at the top.” That guy on the blog you read did. So did the newsletter guy that your gym buddy told you about. The lady on the radio said…We should buy and hold, “but I don’t want to lose a lot of money.”

And all of that noise is waiting for me on the other end of the phone on any given day. I walk into these scenarios on any given Friday, Monday, anniversary, holiday or vacation. That’s my job. That’s your Adviser’s job.

And sometimes clients are just cursed. I mean anything that can be messed up, is. And always with them.

Video conferences? Their camera is the one type that doesn’t work.

Email? “Can you send it again? I never got it.”

Phone calls? Somehow their landline actually drops calls. The timing of their calls to me?…always the worst possible moment.

Trades? God help us. Their lunch order? A disaster. Every. Single. Time.

Computer servers crashing on the day reports are due. Lost paperwork. Wrong paperwork. Mail never got to them. Solar Flares. Hail storms.

And it never happens to the people who are cucumber cool. Nope, the curse loves volatile people.

These cursed people are almost always the same people who also do last minute IRA contributions, or deposit time stamped checks two days after it goes void.

If you are a last minute IRA contributor or check depositor, you’ve been warned. You’re hanging with the wrong crowd.

The Customer is Always…

And why is the $50,000 portfolio that you started trading again since November 2010 is up 17% right now (after you lost 40% in 2008– and we didn’t) vs. the moderately conservative 60/40 portfolio that we are managing today? Which is up 7% on an annualized basis. Why are we making less than your awesome portfolio in these last 8 months, Mr. Complicated Stock Chart Guy? Right now? Versus your 100% stock portfolio? Right now? At this arbitrary moment in time that you want to evaluate the value of our entire relationship, comparing apples and oranges?… Ok.

My job most days for the last three years? Therapist on the jump squad. I’m the negotiator. My job? Talk logic into you– get you out of mental math mode where things no longer add up. And sometimes they don’t make it. It’s almost always poetic. Three days later… the thing that they didn’t want to happen; it does. Sometimes my job is to get you to look at the big picture, sometimes it’s to get you to look at the details. Sometimes all of the issues are because of your childhood issues with money. Sometimes you’re too lazy or scattered for me to do anything to help. Sometimes you’re just over-thinking it & need to pull the trigger.

But that’s my job, deflecting bullets from you. Deflecting bullets for you.

Nothing like wrangling your lizard brain at 9am on a Monday.

Did you know? If you have $250,000 with your advisor, on a net basis you are probably paying them about $100 dollars a month to help you manage your entire financial life and be able to wrangle you to the ground every time the mental math starts working its magic on your sweet little head. $100,000 portfolio is $41 a month. How much value are you expecting?  You have a million? That’s probably paying them about $300 a month, which buys you a bit more latitude. And that’s before taxes or healthcare.

Even still, with me as your trusty financial sidekick, you continue to subscribe to three different newsletters that have three different takes on the world, and you favor a different one each month & then call me on a whim to ask my opinion of the next exotic idea of the month. And I’m supposed to provide a thoughtful answer, without insulting you. And somehow I’m also supposed to manage my day effectively dealing with 100 other clients just like you.

And that’s the thing about being an Advisor. We’re ultimately supposed to be perfect. Or at least perfect in managing your expectations. David Einhorn bought into Yahoo, shenanigans at the company ensued, he sold for a loss. Because everyone knew it was possible, no big deal. But when main street is sold on the idea that they can trade their way to fortune & fame by everyone in the lamestream media, con-artists, crooks, idiots, and penny stock profiteers… not so easy. What am I supposed to do to compete against that illogical logic?

The Cost of Being In Charge

But I get paid the big bucks. So, that’s ok. But what about errors? I just made one. It cost me $2000.

Yep, we sold emerging markets & didn’t buy back for a client when we were supposed to. An error on our block trading spreadsheet. We made it right with the client, but that’s the next three months of our fee — we’re working for free. An indentured slave to a single line item on a 300 line spreadsheet. A mistake at 6:30am & reconciled the next day. And that’s child’s play, $2000.  But for me, that’s a mini-vacation from all of this. That’s 4 months of minivan payments. Gone. Realized at 9:30am on a Thursday morning.

Instant On. Always On.

The craziest part of being your Advisor, is that I’m somehow supposed to walk into any of your questions with the answer or spend my time researching them. You saw some idea you read in Money magazine about five dividend stocks you need to own now. What do I think of the mutual fund you just bought, from your other broker? I have no idea. But you want me to gut check the situation always.

That ETF you just found on Sure, I’ll look it up & do some research for you. It’s a double short  tactical alternative, sector weighted, market cap index that uses an arbitrage strategy, trading volatility, scarcity, and deflation. Logically. It has contango, low volume and is probably in the sweet spot for some institutional algorithm to squash it. And  it has a super high expense ratio.

And, I’m supposed to also educate you what all of that jargon actually means and why your requests are sometimes just dumb. Without insulting you. Thousands of investment products are being launched each year and hundreds of newsletters are being published. Articles on investing ideas and the markets? Research reports? Thousands & thousands a day. Your broker could never keep up. Neither can I.

But that’s my job, deflecting bullets from you & for you.

You’re welcome.

Other Reading: 

Advisor or Adviser? 

Toxic Relationships



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15 thoughts on “Deflecting Bullets

  1. I love the part of what we earn per client. \i actually just explained that to a client today and he was shocked.

  2. Thanks everyone for the supportive comments. I love my job most days & can’t imagine anything else. It’s nice to know I’m not the only one that feels the way I do about the tough days.

  3. While I don’t think I’d forward this post to a client, I sure as hell want to. Ugh, the dreaded error, the newsletters, CNBC, Cramer! Of course I wouldn’t trade this profession for anything, (other than rockstardom?), so that’s just our calling.

    Well done.

  4. Great post, I can relate a little and I hear you loud and clear but at the end of the day if you had my 100k I would annoy you every now and then.

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