Have You Looked Under the Hood Lately?

If you ask a mechanic what percentage of drivers bring their cars in for routine maintenance, they’d probably reply with a shake of the head and a chuckle -- “Not enough.”

Maybe these drivers feel intimidated because they don’t know the first thing about how their cars work. Maybe they’re afraid of mechanics swindling them. Or maybe it’s just plain inconvenient.

So instead they roll the dice and inevitably don’t take action until the “check engine” light comes on.


It’s common to see this exact trend mirrored in the financial services industry: investors often aren’t aware of their fees, returns, or allocation. In other words, they don’t know the vital signs of their financial health. And for the same reason drivers avoid maintenance, investors avoid questioning the system they’re using (or being used in.)

Too complex. Too much intimidation. Too much hassle.

This isn’t investors fault, though. In fact, some traditional investment firms want to keep the waters muddy because if the waters suddenly cleared, those investors would realize that may be overpaying to underperform.

As Matt Hall covered in his book, Odds On, many big-name brokerage firms value sales quotas over client care and education. In any industry, greed coupled with incompetence is troublesome. In wealth management, it could be life-shattering.

It’s time for investors to choose financial advocates, not just your friendly neighbor or your daughter’s softball coach. We’re fans of Jason Zweig, writer for the Wall Street Journal.  He compiled a list of 19 questions  you should ask your financial advisor (#19 is my favorite). 

To return to our metaphor: it’s time to take a look under the hood of your investment strategy. We understand this can be overwhelming -- that’s why we always start with a 10-second questionnaire. It’s about as basic as you can get. You can find that here.


PJ McDaniel