If you are like me, your whole life people have told you what to do. First, it was your parents then maybe it was a teacher. Eventually you began to listen to your friends and then your boss at work (ugh). Some of us are even told what to do by our siblings or our spouses. It’s different for everyone with the exception of this: 99% of us are being told what to do by the marketing engine of the media.
Traditional media and social media are both inundating us with how we should behave in all areas of our lives. Consider the following examples of things that are popular right now in the media:
Crossfit is the best workout.
Paleo diets are better for you than fat free diets.
You must recycle to save the planet.
Cell phones are destroying human interaction.
You may have strong opinions on the above examples. Just understand that we usually formulate opinions on things that are marketed towards us continuously. We are being TOLD what to have opinions on!
An example is the relatively new concern about investment fees. “How low are your fees”? If the answer was “0%” would you use that advisor? I wouldn’t. No one can produce value for me if they aren’t compensated. If you always look for the cheapest, you are sure to find either low value or an approach with no personal touch.
In the world of helping people build and maintain their family’s financial resources, a race to the bottom is exactly that…a race to the bottom. Maybe the questions shouldn’t be “what are your fees” but “what value do I get for the fee”. That doesn’t fit the mass marketing narrative. And that’s exactly why it’s the RIGHT question.
The power of asking the right question is paramount in winning the investment game. The reason for this can be found in our other blog posts about investing (Robo Advisors and Principles Matter are good places to start). If you don’t know exactly what value the advisor is offering, then you aren’t setting yourself up to be a successful investor.