The Investment Advisor vs Financial Adviser Argument: More Good Points

The Investment Advisor vs Financial Adviser Argument: More Good Points

Investment Advisor vs Financial Adviser: The argument continues – which is better for investors? (image via Flickr/Jen Gallardo)

Yesterday I came across a great video from fellow Investment Advisor Josh Brown on his experience in the industry. Josh also runs The Reformed Broker blog – another great resource for investors who are tired of all the Wall St “BS”.

 

 Original Video link: Ex-Stock Broker: I Realized That Most Of What I Did Was Bad For Clients–So I Quit

After watching the video, I realized that Josh and I have had a very similar experience in our careers. My experience is shared below…

Why I Started Musings of a Money Manager

Over the course of my career in finance, I have witnessed two major upheavals in the markets that have drastically and negatively affected investors’ portfolios… and in many cases, the lifestyle they wished to live.

During the tech bust, most of those affected were young entrepreneurs who were able to start over again and find success. But the second bust — in 2008 — saw too many people near or at retirement getting wiped out. In many cases, those affected by the tech bubble had ignored advice and gotten greedy. But in 2008, most of the investors were following the traditional advice of the Wall Street marketing machine and still got burned.

When I first started this blog, I wasn’t quite sure where I wanted to go with it. At first I planned to play it safe and do what everyone else was doing — posting my thoughts on the stock market. While stock tips may help the average investor here and there, what I am realizing is that the best way I can help my readers and clients is to educate them on the culture of Wall Street. Over 15 years in the industry, I have worked for Morgan Stanley and Oppenheimer, with some of the highest-producing brokers in the business. I made a lot of money, earned some impressive “VP” titles, and learned from some of the “best” how to look after your own interests and those of the firm. I also learned that the traditional advice about investing (buy and hold for the long term) was a great way for the firms to make money, but not always in the best interest of my clients.

With that epiphany, I decided five years ago that I would never again be beholden to a firm. Never again would I make money for the firm at the expense of my clients. I knew there was a better, more independent way to run a successful business while looking out for the best interests of my clients. So I started Riverbend Investment Management and have never looked back.

Over these past five years, I have worked tirelessly to create a system of investing that takes into account all of the resources available to me: computer modeling, historical trends, and seasonal patterns, as well as the day-to-day news that affects the markets. Using all of these resources, I recently launched the ARTAIS investment strategy— a completely transparent, investor-driven investment model for my clients. As a “free agent” no longer tied to the Wall Street marketing machine, I was able to create a model that first and foremost is about making money for my clients — short term, long term, through bubbles and busts. And a successful model it has been.

My new goal with the blog is to use my knowledge from the past 15 years (both from inside and outside of Wall Street) to educate and change the perception of investors. Not large institutional investors, but mom and pop investors — those who need to see real growth in their portfolios in order to retire with the lifestyle they choose.

I also want my business to reflect my thoughts and goals in life. One of the reasons I created the ARTAIS strategy was to create a business model that would let me enjoy life and show my kids that life isn’t just about work — that they can work hard but still have time for fun. To do this, I needed to take advantage of technology and resources which would allow me to focus on the aspects of my business that I enjoy (such as tracking trends and models and closely following performance), while outsourcing those aspects of the business that do not affect the bottom line of my clients’ portfolios.

Much of this change in thinking for me was inspired by Tim Ferriss, author of the Four Hour Work Week. While running my Fund will never be a four hour a week job, I have been able to transform it into a job I really enjoy doing and something I am eager to get to first thing on Monday morning.

In future posts, I will explain how my thinking has evolved over the past 15 years in this industry and how my life and business has transformed since striking out on my own.

I also want to use this blog as a platform to educate those investors out there looking for help. Most will ignore what I have to say, but my hope is I will be able to help some.

At the same time, I will be posting updates on my quest to grow the ARTAIS strategy and my firm, Riverbend Investment Management: what resources I have used, how I have utilized technology to build better investment models and better streamline my daily activities, and some of the challenges I run into in trying to do all of this. Hopefully it will motivate investors and someday bring about some much needed change to the industry.

I hope you enjoy it.

Thanks!

John Rothe

Investment Advisor

Riverbend Investment Management

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