Mr. Greg Pollock, President and CEO of Advocis
on Lang and O'Leary
Where To Find It
After seeing the President of Advocis on the Lang and O'Leary Exchange, I couldn't refrain from posting this. I have not connected the link to the image because CBC requires you to watch 10 minutes of commercials to see a couple minutes of programming. I don't want to waste your time, so will give you an overview, but if you really want to see the clip, be forewarned. The segment starts around 28:50 in the clip. http://www.cbc.ca/player/Shows/Shows/Lang+O%27Leary+Exchange/ID/2438219196/
Mr. Pollock doesn’t want to see choice in how advisors are regulated, which I can understand, but he does want choice in how they are compensated. He says eliminating advisor commissions on mutual funds would result in less advice for Canadians. To me, the irony is that advisors are the reason Canadians are so deep into mutual funds in the first place. In Canada, we can buy better investments than mutual funds, but rarely can we pay more than we do for mutual funds. Apparently, that is not one of Mr. Pollock’s concerns.
Regardless, Mr. Pollock and his Advocis organization www.advocis.ca need to get their facts straight. Advocis likes to claim financial advisors are the reason that clients have more financial assets than people who don’t get the advice of an advisor. The truth is, the study, “New Evidence on the Value of Financial Advice” by Dr. Jon Cockerline, https://www.ific.ca/wp-content/uploads/2013/08/New-Evidence-on-the-Value-of-Financial-Advice-November-2012.pdf/1653/ only included people who were happy with the advice they were getting (those who were, obviously, making money) over periods of time, in the “advised“ group. Their results were compared to another group (anyone not currently dealing with a financial advisor) which included anybody who left their advisor because they were not making any money, or worse, were losing money even at the advice of their advisor! Guess which group came out ahead?
In actual fact, the report states, “The large difference in assets that is observed may be the result of other variables besides advice.” Since advice, alone, failed to account for the gap in performance, the report goes on to explain how an increase in the rate of savings for advised accounts could explain the difference. It is not surprising to think people would direct additional money to advisors they were happy with, while others don’t, particularly after being unsuccessful in the past (even with the “help” of an advisor).
What the study actually proves is that people who find a good advisor should take their advice! While Advocis may not be lying to us, they sure as hell aren’t telling us the truth when it comes to the true value of professional financial advice.
Has your financial advisor made you money? Any idea how much that advice cost you?