When I purchased my first vehicle, I wanted something unique, manly, and most importantly, something that would attract the female gender. With those conditions in my mind, the obvious vehicle for me was a… Lada Niva. Here’s my conversation with the car salesman about choosing a colour:
Car salesman: What colour would you like?
Me: What are my options?
Car salesman: They come in many colours, the colours of the rainbow.
Me: Wow! I’ll take red. (Thought it was fitting)
Car salesman: Actually, you can only get white. We don’t bring in any other colours.
Me: I guess it’s white then.
I couldn’t ever figure out the conversation, but because I was so starry eyed with my new vehicle, I just went with it. Interestingly, it turned out to be a pretty good vehicle
I suspect the same sort of conversations have been going on with financial advisors all across North America.
When a mutual sales person presents a “diversified portfolio”, there appears to be many companies, types, and asset classes. Lots of colours. Perhaps you have a balanced fund from bank A, a bond fund from bank B, and an equity fund from bank C.
The thing is though, if you look at the underlying holdings, you really could be holding a redundantly “white” portfolio. My observation over the past years in the financial industry is that this is a chronic issue.
I believe, however, the tide is shifting. There have been a number of media reports showing an increased use of non-conventional investment types, like the ones I spoke about in my Toolbox article.
An article in a US based magazine catering to financial advisors, quoted a US study that found that an overwhelming majority of financial advisors are looking at expanding their use of alternative investments for their clients.
Closer to home, Mr. David Pett writes in the Financial Post about the new portfolio. This new portfolio pie, or asset allocation includes private equity, real estate, real assets and alternatives, all of which can be found in the exempt market.
When you are considering the advice of your financial advisor, take a look at their toolbox. Does your financial advisor have the proper tools to help you reach your financial goals?
Marty Gunderson is an expert who helps companies navigate through the Exempt Market. He has served in a variety of leadership positions in the industry, from sales to issuer to dealer. He is the founder of www.BetterReturns.ca, a site that highlights a few quality exempt market offerings. To contact Marty, please email marty (at) idealeader.ca