All in all, I am a pretty relaxed fellow. Still, I'll be the first to admit that I can get kinda ornery from time to time. It seems like I am permanently sleep deprived, and the challenges of juggling family and work commitments leaves me with little time and, occasionally, little patience.
And right now I have little patience for people taking pot-shots at my profession.
I'm not talking about people taking swipes at me personally. That kind of thing happens from time to time, and it's not something that I get too hung up on.
What bugs me is people who use the financial planning profession as their whipping boy. Especially if the people doing the whipping are in the financial industry themselves.
Don't get me wrong. I absolutely think that there is room for improvement in the profession. What I mean is that I get irritated when people opportunistically exploit a situation to further their own personal agenda.
This can take various shapes, but one of the common themes is, with the benefit of hindsight, looking at what has happened in the investment markets since the Great Recession of 2008.
In 2012 it's easy enough for a person to say that, over the last few years, investors should have shunned equities and loaded up on fixed income investments. But let's stop for a moment and examine what that means.
It means turning your back on what is indisputably the best asset class in the history of the planet for growing your money over the long-term, and thus protecting it from the ravages of taxation and inflation. Indisputably.
Better than gold. Better than real estate. Better than anything. People who disagree with this statement are myopically looking only at recent history. By definition, recent history is not long-term.
It also means loading up on an asset class that historically just breaks even after taxes and inflation. It means locking in your investments at historically low interest rates. It means exposing your assets to capital losses when interest rates rise.
Even with the benefit of hindsight, why would people think that minimizing the best asset class for long-term growth, while simultaneously maximizing the asset class with limited potential is a good thing?
Meanwhile, although bear markets are a perfectly normal part of the business cycle, the Great Recession was not a normal bear market.
Think of all the bad times that we have had over the years. The bursting of the tech bubble in 2000. Black Monday in 1987. The horrible recession of the early 1980s where we had both double digit inflation and double digit unemployment. OPEC tripling oil prices in the 1970s when every car on the street was a gas guzzler. None of these things, nor any other bad patch, earned the right to be called the Great Recession.
One of the things that people are doing now is looking at the Great Recession and assuming that those are normal times. I think that's a mistake. If the Great Recession is a once-in-a-hundred-years event, is it not paranoia to fear an imminent reoccurrence?
Let's not confuse what has happened over the last 5 years with what will happen over the next 5 years. As Wayne Gretzky says, "I skate to where the puck is going to be, not where it has been."
So right now we have some people out there who are opportunistically exploiting the situation to further their own personal agenda, and telling people what they want to hear.
Some of them are doing a real good job of telling what you should have done five years ago. Hey, it's easy to know the past by looking in the rear view mirror, but the rear view mirror doesn't tell you where you are going, does it?
The financial planning professional will tell you what you need to know, not what you want to hear. And sometimes what you need to know isn't what you want to hear.
As I say, I'm losing patience with people taking pot-shots at the financial planning profession. As legendary oilfield firefighter Red Adair says, "If you think it's expensive to hire a professional to do the job, wait until you hire an amateur."
The opinions expressed are those of Brad Brain, CFP, R.F.P. CLU, CH.F.C., FCSI. Brad Brain is a Senior Financial Advisor with Manulife Securities Incorporated, in Fort St John, BC. Manulife Securities Incorporated is a Member of the Canadian Investor Protection Fund. Brad Brain can be reached at [email protected] or www.bradbrainfinancial.com.
