Investor Education
Back to the Basics: Useful Tips on Investing
Back to the Basics: Useful Tips on Investing
Sometimes, the most effective thing you can do is simply go back to the basics.
A great opportunity mentioned in the infographic is emerging markets. The East is the clear choice of regions to look to when considering foreign investment. According to Bloomberg, China, South Korea and Malaysia are the top three emerging markets. These nations have all experienced noteworthy growth in their GDP, with China seeing a whopping 7.35% growth. Here’s a list of the best emerging markets of 2014, courtesy of Bloomberg.com.
It is important to remember that even though some companies receive outrageous valuations due to industry or media hype, only buy stock that trades at a reasonable valuation. Markets will correct themselves in the long term and hype can only last for so long.
Penny stocks have a bad reputation, but they should not be overlooked. If you are willing and able to take the risk, they have the possibility of being incredibly profitable. As Warren Buffett is quoted, “the most successful investors have iron nerves and are willing to take smart risks.”
Here are some tips from the man himself Mr. Buffett on investing in the stock market.
Original infographic from:Â TimothySykes.com
Investor Education
The Top 5 Reasons Clients Fire a Financial Advisor
Firing an advisor is often driven by more than cost and performance factors. Here are the top reasons clients ‘break up’ with their advisors.
The Top 5 Reasons Clients Fire a Financial Advisor
What drives investors to fire a financial advisor?
From saving for a down payment to planning for retirement, clients turn to advisors to guide them through life’s complex financial decisions. However, many of the key reasons for firing a financial advisor stem from emotional factors, and go beyond purely financial motivations.
We partnered with Morningstar to show the top reasons clients fire an advisor to provide insight on what’s driving investor behavior.
What Drives Firing Decisions?
Here are the top reasons clients terminated their advisor, based on a survey of 184 respondents:
| Reason for Firing | % of Respondents Citing This Reason | Type of Motivation |
|---|---|---|
| Quality of financial advice and services | 32% | Emotion-based reason |
| Quality of relationship | 21% | Emotion-based reason |
| Cost of services | 17% | Financial-based reason |
| Return performance | 11% | Financial-based reason |
| Comfort handling financial issues on their own | 10% | Emotion-based reason |
Numbers may not total 100 due to rounding. Respondents could select more than one answer.
While firing an advisor is rare, many of the primary drivers behind firing decisions are also emotionally driven.
Often, advisors were fired due to the quality of the relationship. In many cases, this was due to an advisor not dedicating enough time to fully grasp their personal financial goals. Additionally, wealthier, and more financially literate clients are more likely to fire their advisors—highlighting the importance of understanding the client.
Key Takeaways
Given these driving factors, here are five ways that advisors can build a lasting relationship through recognizing their clients’ emotional needs:
- Understand your clients’ deeper goals
- Reach out proactively
- Act as a financial coach
- Keep clients updated
- Conduct goal-setting exercises on a regular basis
By communicating their value and setting expectations early, advisors can help prevent setbacks in their practice by adeptly recognizing the emotional motivators of their clients.
Curious about what drives investors to hire a financial advisor? Discover the top 5 reasons here.
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