Do you know buzzword bingo? For a particular setting, such as a meeting or a presentation, you collect the usual clichés (for example „out of the box“, „it's a process“ or „develop synergies“) and tick them off one by one as they crop up. Once they've all been said: bingo! You can also play the game with conventional financial advice. Sadly! Because these phrases are often a sign that expensive products are being sold with no regard for the client's individual investment goals. Bad or flawed advice can get expensive. At times, your very financial existence is at stake.
We'll name five clichés for you – sample adviser statements – that should make you, as the client, suspicious.
1. „I recommend our life and pension insurance.“
Careful: this adviser will be primarily interested in selling you the bank's own financial products and pocketing a commission for doing so. This conflict of interest can hardly be resolved within the prevailing banking system. Far more convincing, by contrast, is an investment solution based on independent, fee-based advice – one that you pay for as the client, and which therefore aligns with your wishes and needs.
2. „These shares or bonds are a dead-cert tip.“
One thing is certain: there are no dead-cert tips. As a rule, promises of high interest and returns are always a sign that the risk of a loss is even higher. An honest adviser will point out to you during the conversation that investments whose returns exceed those of German government bonds come with an increased risk of loss. So if someone offers you three, five or even ten percent returns without any risk at all: hands off!
3. „Make up your mind quickly! An opportunity like this won't come around again any time soon.“
This statement, too, is simply detached from reality. The price of financial products is redetermined within milliseconds by supply and demand. That is why it is impossible for banks, fund companies and insurers to offer investments at a one-off preferential price. The bottom line: there is no such thing as the right moment. But that also means: it is always the right moment to invest in an independently created, broadly diversified portfolio. Anyone who waits is giving away return opportunities.
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4. „I only offer this fund to select clients.“
Try googling „ship funds“ and „bankruptcy“. Over the past few years, several billion euros of investors' money have gone under here. Why? Because advisers wanted to let their important clients enjoy special benefits with an attractive product. The risks were systematically played down in favour of their own commission. One thing has to be clear: a fund is not an exclusive event that gives preferential treatment to individual investors. What's more, small funds with only a few investors are exposed to major risks. Large funds with a great many investors, by contrast, can balance out market fluctuations far better.
5. „There's an attractive property in Canada that you can invest in.“
Hands off any property investments that you can't get a personal, on-the-spot look at. Anyone buying property should know the location, the surroundings and the condition in detail. Accordingly, a reliable adviser will advise you against any investment in a single property where a serious, independent inspection is practically impossible.
The lines show it: at conventional banks and insurers, what prevails is product selling, not investing aligned with your individual investment goals. Digital investment advice like quirion resolves the conflict very simply. In five steps we determine your investment goals and risk appetite and put an independent investment proposal to you. Why? Because we do without commissions and kickbacks. You pay us a fee for our work. We invest your money on scientific principles, entirely rationally, in broadly diversified portfolios on the international market. Our experts continually rebalance the fluctuation risks according to your specifications. While your money quietly works away with us, you no longer have to worry about a thing.
