Category Sales Talk

DIY Investing or Work With a Financial Advisor?

Paul - The Wry Eye Guy Leave a comment
Good old-fashioned financial advice.
But at what price?

DIY investing can drive you a little crazy. Do you like the crazy? Are you enjoying the work that comes with portfolio management? Some of us do! But it gets a little more challenging when we need to withdraw money during retirement. And will a surviving spouse be able to carry on with the crazy portfolio in the event the “money manager” departs first? Are you a good DIY investor? Or would you do better with an advisor?

There is an easy way to figure out if you should consider paying a fee to have a professional manage your portfolio & the retirement cashflow stream for you.
And it’s this …

Compare your DIY portfolio performance against an equivalent ETF. We all need a “benchmark” to check our portfolio against. If you’re 100% in globally diversified stocks, for example, compare your portfolio performance to that of one of the XEQT, ZEQT, VEQT all-equity ETFs. If you’re in a 60/40 stock & fixed income mix, compare your DIY portfolio performance against XBAL, ZBAL, or VBAL. Are you buying a mix of Canadian & US large-cap stocks? Then compare that to an appropriately allocated portfolio of VFV & XIU ETFs. A portfolio filled with way too many stocks & ETFs might also be usefully compared against one of the all-in-ones. If your portfolio performance lags its benchmark by 1% or more, you might want to consider handing it over to a financial manager.

As an aside, since some of these all-in-one funds are so new, you may need to break them down into their constituent ETFs to usefully use them for benchmarking over longer time periods. The longer the history, the more useful the insights.

I’m using 1% here because many financial advisors charge an annual 1% of portfolio value as a fee for managing a portfolio. Is that fee worth it? Get the advisor’s performance history & compare that to an equivalent benchmark ETF too. Their recommended portfolio should only lag the return performance of those ETFs by the 1% fee. If they meet that requirement and if your self-managed portfolio was lagging by more than 1%, you could be getting better results by paying the advisor the 1% fee. As a bonus, you’ll have less work & an advisor who will tell you that everything will be okay when the markets are imploding. Hand-holding is included in their fee! For retirees, the advisor may also plan the income strategy & tax-efficiently manage the cashflow for you, across all accounts. You might even get some estate planning advice along the way. If you have a good advisor, they can deliver a lot of value. Even if they underperform the market average by the amount of the fee they charge.

Can you find an advisor that will consistently beat, after fees, the market or benchmark returns? I don’t know, but be sure to review their data supporting this opinion very carefully. And not necessarily against the benchmark provided by the advisor.

Unfortunately, it can be pretty challenging to tell if an advisor is any good. And those investors who are most challenged by DIY investing will also be challenged by the process of choosing a good advisor. We all like to believe we have the best doctor taking care of our health. In reality, most of them will be closer to average than exceptional. Fortunately, there are minimum standards & qualifications that we hope will ensure an adequate level of service from these professionals. The same is only variably true for financial advisors. Because the qualifications for calling yourself a financial advisor in Canada are variable. Some advisors are closer to being a product salesperson. And while some feel or profess a fiduciary responsibility, it is not a legal duty or obligation for many. They cannot just take your money & head off to a beach somewhere, but they may be putting their own, or their company’s, interests just slightly ahead of yours when it comes to investment choices. Even if only subconsciously.

Of course, a good salesperson will make you feel better about the relationship you are getting into. And that’s not a bad thing. But you also need an advisor who can at least deliver average market returns for a broadly diversified portfolio. Minus the fees. And you do need to know exactly how much you’re paying for whatever services & products are being recommended! There may be advisory fees and product fees, check carefully.

If you are a balanced 60/40 style investor, what would you think of paying an advisor to put all your money into ZBAL? Or maybe 60% into XEQT, with the other 40% into a couple of bond & HISA-type ETFs? We sometimes resent paying for simplicity. Advisors know this & are less likely to present you with such a simple portfolio solution. After all, if things are that simple, why would we need an advisor!
Yet, in DIY mode, we sometimes struggle to follow the simple path ourselves. Instead, we prefer to work hard creating a portfolio that underperforms!

Of course, that simple solution might not be the ideal path for everyone. There may well be good reasons for some investors to pursue a lower volatility strategy, a higher income strategy, or whatever. But it is still useful to compare the total return on our own portfolios against those of low-cost, market index ETFs.

Robo-advisors are trying to bridge the gap between the advisory space & DIY, typically for about a 0.5% fee premium, in addition to ETF fees. I love the idea but it feels like you’re paying the added fee for the robo to pick the same ETFs that are in the all-in-one ETFs. Like some human services, they can fancy it up with one or two more esoteric picks. So you feel like you’re getting something extra for your money. But you generally won’t get the more valuable hand-holding that comes with the more expensive advisory services. Maybe AI will help with this down the road. But AI has been around for a lot longer than current market noise suggests & it hasn’t happened yet. Some robo-services do include human phone support. That might develop & grow into something more valuable going forward.

Isn’t there scope for fee reduction on the human advisory side too? Or for a service with a far more rapidly declining tiered fee-structure for larger portfolios? Are there any low-cost advisors out there? Shouldn’t there be more advisors competing with the 0.5% fees of the robo-advisors. Simpler portfolio advice & management should come with lower fees, no? I’m okay with portfolios constructed with low cost index funds. For some investors, the greater value may be more in managing asset location (what ETF goes in which account) & retirement cashflow. Some advisors include financial planning, a valuable service too. But can it be done for a 0.5% fee? Or less?

I realise that someone else’s job always looks easier than it really is from the outside. But I think financial advisory (& real estate) fees are very expensive in Canada. Particularly for the cookie-cutter portfolios offered by some companies. I’m totally okay with the right cookie-cutter portfolio, I just don’t want to pay through the nose for it. High fees are an ignorance premium being levied on a population that didn’t get this kind of knowledge coming through our educational system. And our schools still don’t prepare kids for the digital environment that now makes it far easier for the DIY investor to learn things the hard way. Fees will likely drop over time, as education & AI combine to work at improving the competitive landscape. Though in traditional Canadian fashion, it’ll probably drag out for a long time yet. And some of us older folk might not live long enough to benefit! 🤪

Regardless of the path we choose, it’s worth occasionally benchmarking our portfolio performance against a low-cost, well-diversified, ETF portfolio. One that approximately matches our portfolio’s asset allocation. Benchmarking can provide insight on how decent a job we’re doing with our investing strategy. And if we’re not doing such a good job ourselves, it may be worth talking to a financial advisor. But if you still find the idea of paying an advisor distasteful, then you’d better figure out how to learn to do it better on your own. Or maybe just use the benchmark ETFs instead!

If you want to learn more about saving & investing from the ground up, I’d like to suggest that you check out Double Double Your Money, available at your local Amazon store.

Important – this is not investing, tax or legal advice, it is for entertainment & conversation-provoking purposes only. Data may not be accurate. Check the current & historical data carefully at any company’s or provider’s website, particularly where a specific product, stock or fund is mentioned. Opinions are my own & I regularly get things wrong, so do your own due diligence & seek professional advice before investing your money.

Still Doing the Work from Home Thing?

Paul - The Wry Eye Guy Leave a comment
Work Wear?

I don’t even know how long I’ve been working from home now, but it feels like a long, a very long, time. Though I really worked from home pre-covid, it didn’t feel like that. Because I got to travel a lot. On the work front, we’ve all gotten much better at online meetings. So many phone calls & email exchanges turn into online meetings now.

We’re all much better at, & more prepared for, impromptu online sessions too. I keep a hairbrush in my desk drawer now, for example. I’ve moved the underwear-laden clothes horse out of my office. And I’ve swapped out the juvenile posters on my back wall with some hoity-toity Venetian masks. They’re a good talking point, while we wait for that important laggard to join the session. It’s all very streamlined & business-like these days!

All in all, the whole work from home thing is far more professional now. Far smoother. It is also quite effective. And very time & cost efficient. If everything went back to normal tomorrow, I think I’d still use the online get togethers. A lot.

But now that things are starting to open up a little more, I recently took the opportunity to go out for a mask-to-mask meeting & to bump elbows. I had to dust off my big-boy pants. I had forgotten that pants had creases. It took me a while, but I managed to dig out a belt that wasn’t a draw-string. Finally, I found a shirt with a collar & more than three buttons.

I was feeling pretty good about heading back into the real working world again. As I was pulling out of my driveway, good job I noticed that I was barefoot & wearing flip-flops!

How are you doing, as you transition back to the new normal?

You’ll have to cut me a little more slack on the weight-loss front though. I’ll come clean on that soon! 😜

Civil Discourse in Life, Work & Leadership Roles

Paul - The Wry Eye Guy Leave a comment
Imperfect but Beautiful!

Imagine your child, or your grandchild, going off to school for the first time. It’s natural for us to be anxious; our little one is venturing into the big, bad world, all alone, for the first time. That’s almost as traumatic a time for parents & grandparents, as it is for the child. Still, we take comfort from our parenting skills. And from the values we share with friends & neighbours in our community. It’s a nice school, with respected teachers, who are reliably acting in loco parentis. Everything will be fine.

Until you collect your weeping child at the bus stop!

The gut-wrenching, heart-stopping impact of this moment can be felt by almost every human being. Upon discovering that your child was denigrated by another. Be it for reasons of appearance, affliction, race, religion, or any other cause, the immediate, visceral reaction may be one of extreme anger towards the perpetrator.

But, often, the pain was caused another child. Despite our emotion, we reign in our more agressive instincts & proceed with a more cautious & civil approach. We need to, both, sooth our child, & to address the problem. And in such a manner that it allows both children to move forward, together, in a civil & mutually respectful way.

In just about every sales course I’ve ever attended, or any sales book I’ve ever read, we are cautioned against speaking ill of our competition. Despite that, I’m guessing that most sales people will admit to having uttered a phrase that starts out something like this …

“That’s an interesting point, Ms. Customer, but …”

I should add a little mea culpa at this point, for my own, very rare, transgressions!

How about politics? It almost seems like the norm nowadays, in many countries, is to denigrate & divide. And some of us seem content, perhaps at times gleeful, that this is the case. As a politician, if you can lock in the firm support of a sufficiently large part of the constituency, you have a blueprint for successfully winning, & holding, power. It seems like everything is in play here; truths, half-truths, & possibly mis-truths, can be all be used. So long as the win is delivered. Sometimes, this is the will of the majority. And that may be democratic. But is it right?

Taking that political logic back to sales; were we to use truths, half-truths, & possibly mis-truths in the sales environment, would we be more successful? Frankly, if I could win 40 or 50% of the orders in my customer base, by modelling my approach on this political strategy, I would probably win some additional orders in the near term. Sure, half the base wouldn’t be speaking to me. But who cares? I’m still ahead where it matters. Right!?!

It almost feels like we’ve come around to believing that civil discourse is no longer required in our political leaders. Is it still required in our working life? Or in our daily interactions within our communities?

If this is the kind of world we want to live in …

Why do we pretend to teach our children that they should grow up to be nice, kind of heart, generous of spirit, & capable of civil discourse, as adults?

And if this is not the kind of world we want for our children …

Why do we sponsor & model such behavior for them?

Working From Home

Paul - The Wry Eye Guy 2 Comments
My Work from Home Colleague!

I think I’m getting the hang of this working from home thing at last. It was a little chaotic at the start. I found myself getting caught in unplanned online video conferences with yesterday’s t-shirt on. Or with a three-day beard. Sometimes, I discovered that I’d forgotten to comb my hair, but only when my headshot popped up on screen. Now I have a much better routine. But I also keep a hairbrush in my desk, just in case!

I’ve always done some work at home, so my office is well set up from a technology standpoint. Nothing special, I’ve got a desk, dual monitors, fast internet, great cellular signal, & all the basic stuff you might need. My office is big enough not to be claustrophobic, with a nice view out the window, overlooking a forested strip with a babbling brook running though it. The most practical addition I’ve made is to squeeze in an armchair & ottoman. My back suffers after a few hours at the desk, regardless of where I’m working from, & this proved a Godsend. A few minutes stretched out on this comfy old chair is a wonderful cure. Can’t believe that I didn’t think to do this in my real office. Years ago.

I must admit, my home office is a little untidy. With my desktop covered, I’ve taken to using the floor as a sorting surface. I really need to work on that. And my office is pretty boring too. Functional, but really plain & blah! I’ve taken to studying the backgrounds of home offices on TV these days. I’m trying to watch less CNN & Fox News (a story for another day!) & my entertainment tends to come from BNN Bloomberg now. I’m fortunate to still have a job & I figure BNN offers the best insight into my future job security. I time my lunch break to catch my favourite show on BNN. Not only is the stock market very entertaining during these crazy times but, with different guests being interviewed every day, this show is a great source of home office inspiration.

You can tell these people have already done what I’m planning to do. Their home offices have improved, week by week. Some of them look so good now that it’s as though they’ve been professionally staged. Strategically positioned highbrow books, nice artwork appearing on the once-bare walls. Accent furniture pieces. Fresh flowers. And some people introduce their doggies to viewers. Very cute, almost makes me want to rush out & rescue a puppy!

On the back wall, I think I’m going to go with some artwork. And some enigmatic bric-à-brac on a console table. That should all make for good idle chat. While we wait for the late-comers to sign into those online meetings. Though I might have to refinish the table so it matches the decor a little better. Another thing for the to-do list!

I’m going to put my own artwork on the wall. I once painted, & even sold some paintings along the way. If there had been cellphones back then, I’d probably have some pics of those works to show you how brilliant I was! 🤪

Sadly, I abandoned the hobby when I got engaged with an early version of Adobe’s Photoshop software. I’ve long been a photography aficionado, so superimposing digital art manipulation on my photography hobby was a perfect fit. It was fast & efficient. And it made a few of my mediocre photographs look better. I’m thinking of doing a gallery of artsy pics of my real office for my home-office wall! 😂

The weirdest thing about working from home is the lack of social contact. I can’t believe I’m saying this, because I had come round to hating airports, but I’d kill to be back flying again. On the other hand, I don’t want to die, so that probably won’t be happening any time soon. I really, really miss the office & customer interactions. You can’t spend a career in sales without enjoying time with people. Regardless of career, I think we all need this social interaction. Many of my friends come from the ranks of my colleagues & customers. Even though some of the bastards buy competitive products on occasion, they’re still my friends! 😜

Our colleagues, customers & suppliers are all very much an important part of, not only our work, but of our social circles too. I find it difficult to imagine, despite the potential cost savings, that too many companies will go to a 100% work-from-home, office-less model. It’s just not a social solution & that aspect of working life may prove too important a contributor to the bottom line. Thankfully!

I can do this & I’m getting better at it with each passing month. But I really hope we get a successful vaccine soon. How are you doing with this whole work from home thing? Let me know. And I wouldn’t mind if you sent me your ideas for home office decor either!

Just in case I’ve got to walk around during one of those online meetings I’m off to hunt online for a pair of dressy flip-flops now! 😁

Stay safe out there. 😷😜

Sales, Marketing, Diet, & Civility

Paul - The Wry Eye Guy

This is a different kind of post for me, so please stick with it if you come across an unusual comment along the way. It’ll come clear by the end, I hope.

Montréal Fast Food

Montréal Fast Food

I’m heading home from Montréal last Friday & it’s Montréal in December, so I’m at the airport early in case there are any weather challenges in getting there. My phone needed to be charged & , once at the gate, I sat at one side of those little tables with the power outlets & charging ports at the back. At the other side of the table was another traveller, doing the same thing. While my sales regalia is often chinos & a company-logoed polo shirt, this guy was dressed in a really sharp suit, with a nice tight Windsor-knotted tie. In my defense, I have to climb inside working machinery sometimes. And yes, I can do a nice Windsor knot too! His shoes, unlike mine, were polished to a high shine. How’d he do that with Montréal’s salted & slushy streets? While I love to chat, other than a nod & a quick smile, I tend not to bother other travellers, as many want to be left alone. Having the earphones in is the clue to that!

After a few minutes, he unplugged, & started to chat. OMG, was this a gay guy hitting on me? I was used to a lifetime of women swooning at my feet, wouldn’t it be natural for a gay guy to feel the same way? Turned out he was, shocker this, in sales & marketing. With a focus on social media & the digital universe.

I was immediately engaged & the conversation took off, with both of us fighting for airtime. This guy had a very different outlook to mine. Over the course of my career, I’ve greatly enjoyed the company of the people I have had the pleasure of working with. Sure, I’ve met a few doorknobs along the way but, for the most part, I have enjoyed the company of colleagues, suppliers & customers alike. And I’ve made some really good friends along the way. His response to this was pretty blunt …

“Are you in business to make friends? Or to make money?”

Can’t you do both?

Not according to my fellow flier! His approach is to isolate & attack, hard, his target audience. In part, by denigrating the “others”, other suppliers & other customers. His philosophy is like some maniacal abuse of the Pareto principle … Forget the 80%, they don’t matter. Instead, focus on the 20% with the highest potential return. And milk them dry. Any way you can. For as much as you can.

But what about longer term relationships? And repeat business?

All garbage, according to this philosophy. The immediate kill is where it’s at. There is no long term view. Other than just doing more of the same with new prospects.

This went against everything I believe. I was gobsmacked, time & again, listening to his gospel. But he was relentless. He took a look at my blog on his phone & ridiculed that. Brutally. And, given the weight-loss bias of the blog, he laughed out loud as he rolled his eyes, while nodding towards my waistline, and passing a very sarcastic comment. One I’m too embarrassed to repeat here. Then he told me, guaranteed me, that I’ll do better with my diet after hearing his message. I’ll come back to that point below.

Montréal is a great town to eat in. I often think that spending my early years in Canada, in Montréal, contributed to my circumferential challenges. I had just enjoyed a week of dietary debauchery in this great city. I had had lunches & dinners with suppliers & customers. Though he ripped me apart for my choices of dining companions too. The bottom line was that I knew the scale would echo his condemnation when I got home.

Despite the scars, I held my calm demeanour, even if only on the outside at times. I wondered how it might have gone in my younger, more volatile, years. That gave me pause for an occasional smile, & that seemed to throw him off stride every now & again!

Before leaving, this wasn’t his gate, he gave me some blogging advice. Most of which was far too callous than I think I could ever use. But he did relent & give me a couple of milquetoast (his description!) things to try. They’re in this post, did you spot them? Send me a message & let me know. I’m curious to see if he’s as good as he thinks he is.

Despite it being a great conversation, I still think there is more to be said for just being a little more caring & civil towards each other. Sales is all about taking away a customer’s pain, not inflicting more. I want my customers to come back to me. Again & again.

Oh yes! The rat was right about one thing, my diet is going better since I returned. In fact he was right about two things, he also told me that I wouldn’t have the balls to do the post without explaining it, or putting a warning label on it. I guess my warning label was the opening paragraph. Go figure!