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:
- How do I get paid?
- Do I actually need to know how it works to sell it, or is there a nice glossy brochure?
- 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 [email protected] with their contact information, and we’ll be happy to get more information to both of you.