Golf Balls, Financial Advisors, and Your Portfolio

Financial advisors are not at the top of our list of favorite people in the world. Why? Frankly, most are married to an antiquated asset allocation approach and dedicated to the quickly eroding buy and hold model. The normal conversation with a financial advisor when we approach them to talk about how their clients can get exposure to managed futures to better diversify their portfolios is usually prioritized in the following manner:

  1. How do I get paid?
  2. Do I actually need to know how it works to sell it, or is there a nice glossy brochure?
  3. Is it good for my clients?

Whether or not an investment is right for a client is the first thing we ask, so to see it so low in the list of priorities for people managing money is irksome at best. How we get paid doesn’t cross our minds until about 12 steps down the line. But the stock and bond world is much different than our world – there’s a reason every financial advisor we ever play golf with has an American Funds umbrella and Northern Trust golf balls. The mutual fund companies found out long ago that financial advisors are more likely to sell the funds which send them free golf balls rather than the funds with the lowest cost, best performance, etc.

But here we are, after 10 years of flat stock and bond performance, while managed futures has done quite well  [Disclaimer: Past performance is not necessarily indicative of future results.] If you need a refresher on how well they’ve done, we’ve got plenty of materials that show just what kind of performance they can deliver. It may have taken longer than we would have liked, but RIAs are being forced to admit that managed futures exist. Some are doing their homework and finding people like Attain to work with in getting their clients efficient (and customized) managed futures exposure. Some are simply putting clients into the newly launched ETFs and mutual funds which purport to track managed futures exposure (broken record on the subject found here). But most, unfortunately, are still pretending that managed futures don’t exist.

Are there any financial advisors out there trying to evolve with the times? Or is it a dying industry hopelessly tied to the fate of the stock market?  Where are the good ones who do their homework and advise their clients based on potential value added to their portfolio- instead of looking for the easy, cookie cutter options?

Know of a good one? We’d love to meet them. Hoping you can work with your advisor to learn whether or not managed futures works for your portfolio, IRA, etc? Shoot us an email at invest@attaincapital.com with their contact information, and we’ll be happy to get more information to both of you.

3 comments

  1. I once had an advisor ask me what the Y-T-M is for a multi-manager managed futures fund! I was confused because I never heard of Y-T-M before. So I asked him what does Y-T-M mean? He said “Yield-To-Me.” I was speechless.

  2. […] Why are financial advisers still ignoring the managed futures space for their clients?  (Attain Capital) […]

  3. […] Golf Balls, Financial Advisors, and Your Portfolio by WALTER J. GALLWAS Thu, 22 Sep 2011 | Published in Blogging Don't forget to Tweet this Blog Post, Like it and share it to LinkedIn. Tweet var addthis_product = 'wpp-261'; var addthis_config = {"data_track_clickback":true};Golf Balls, Financial Advisors, and Your Portfolio by WALTER J. GALLWAS […]

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Disclaimer
The performance data displayed herein is compiled from various sources, including BarclayHedge, and reports directly from the advisors. These performance figures should not be relied on independent of the individual advisor's disclosure document, which has important information regarding the method of calculation used, whether or not the performance includes proprietary results, and other important footnotes on the advisor's track record.

Benchmark index performance is for the constituents of that index only, and does not represent the entire universe of possible investments within that asset class. And further, that there can be limitations and biases to indices such as survivorship, self reporting, and instant history.

Managed futures accounts can subject to substantial charges for management and advisory fees. The numbers within this website include all such fees, but it may be necessary for those accounts that are subject to these charges to make substantial trading profits in the future to avoid depletion or exhaustion of their assets.

Investors interested in investing with a managed futures program (excepting those programs which are offered exclusively to qualified eligible persons as that term is defined by CFTC regulation 4.7) will be required to receive and sign off on a disclosure document in compliance with certain CFT rules The disclosure documents contains a complete description of the principal risk factors and each fee to be charged to your account by the CTA, as well as the composite performance of accounts under the CTA's management over at least the most recent five years. Investor interested in investing in any of the programs on this website are urged to carefully read these disclosure documents, including, but not limited to the performance information, before investing in any such programs.

Those investors who are qualified eligible persons as that term is defined by CFTC regulation 4.7 and interested in investing in a program exempt from having to provide a disclosure document and considered by the regulations to be sophisticated enough to understand the risks and be able to interpret the accuracy and completeness of any performance information on their own.

RCM receives a portion of the commodity brokerage commissions you pay in connection with your futures trading and/or a portion of the interest income (if any) earned on an account's assets. The listed manager may also pay RCM a portion of the fees they receive from accounts introduced to them by RCM.

See the full terms of use and risk disclaimer here.

Disclaimer
The performance data displayed herein is compiled from various sources, including BarclayHedge, and reports directly from the advisors. These performance figures should not be relied on independent of the individual advisor's disclosure document, which has important information regarding the method of calculation used, whether or not the performance includes proprietary results, and other important footnotes on the advisor's track record.

Benchmark index performance is for the constituents of that index only, and does not represent the entire universe of possible investments within that asset class. And further, that there can be limitations and biases to indices such as survivorship, self reporting, and instant history.

Managed futures accounts can subject to substantial charges for management and advisory fees. The numbers within this website include all such fees, but it may be necessary for those accounts that are subject to these charges to make substantial trading profits in the future to avoid depletion or exhaustion of their assets.

Investors interested in investing with a managed futures program (excepting those programs which are offered exclusively to qualified eligible persons as that term is defined by CFTC regulation 4.7) will be required to receive and sign off on a disclosure document in compliance with certain CFT rules The disclosure documents contains a complete description of the principal risk factors and each fee to be charged to your account by the CTA, as well as the composite performance of accounts under the CTA's management over at least the most recent five years. Investor interested in investing in any of the programs on this website are urged to carefully read these disclosure documents, including, but not limited to the performance information, before investing in any such programs.

Those investors who are qualified eligible persons as that term is defined by CFTC regulation 4.7 and interested in investing in a program exempt from having to provide a disclosure document and considered by the regulations to be sophisticated enough to understand the risks and be able to interpret the accuracy and completeness of any performance information on their own.

RCM receives a portion of the commodity brokerage commissions you pay in connection with your futures trading and/or a portion of the interest income (if any) earned on an account's assets. The listed manager may also pay RCM a portion of the fees they receive from accounts introduced to them by RCM.

See the full terms of use and risk disclaimer here.

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