June 11, 2009, 5:32 am

An Interesting Way To Know If Your Funds Are Invested With The Right Investment Company

by: The Financial Blogger    Category: Investment, Market and Risk
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I am referring again to the meeting we had with a portfolio manager last week. This guy inspired me trust in what he says and his investment strategies but for a very specific reason.

He was nicely dressed, had glasses, had all kind of diplomas and designations on his business card and was old enough to have 10 to 15 years of experience in the market. Unfortunately, most financial analysts show the very same profile. Ok… maybe not the glasses and the good taste for nice suits (this one was married so he had the “feminine edge” on his side in term of taste for classy suit 😉 ). More seriously, all those characteristics are the basics of a “standard” financial analyst to me.

However, he mentioned something very important in his introduction. He says that most of his net worth was related to the investment firm he works for. Even better than that, most employees have the very same situation; about 60% of them are shareholders of the investment firm. It wouldn’t impress me much if the investment firm had more than 10,000 employees and everybody had 100 shares or so. In their situation, the investment firm is 100 employees and they hold most of the shares available.



Another interesting point was the fact that he didn’t have his own portfolio. Even though he could manage his portfolio and buy the stocks he want, he decided to invest all his money (registered, non registered, RESP, spouse investment accounts) with his investment firm and according to the investment firm portfolio.

He said that there was no point of selling something if you are not convinced. Therefore, since he truly believes in his employer’s strategy and competence, he decided to invest most of his assets with them.

I sometimes ask myself if people believe in their company. I personally do believe in mine but I must admit that it becomes harder with the size of the company. Between the VP and me, there are hundreds of employees while there are probably 10 people between the new guy on the desk and the VP at the small investment firm. This obviously helps you believe in the management team… as you know them!

Being fully invested with his company obviously doesn’t make him right about his opinions and assumptions. It doesn’t make him a better financial analyst and will probably show similar records to another VP at another investment firm. However, the fact that he truly believes in his product makes him sincere and this is what really matters when you talk to a financial expert!

Your financial planner won’t obviously invest in all products offered by his financial institution. However, he should use some of them according to his own investment profile. This tells a lot about commitment and the trust he has in his product. Ask him the question and you will see the look in his face. This will also tell you a lot about your planner 😉

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