Who Should You Trust To Manage Your Money?


Figuring out who should manage your money is often a challenge. You’d like to believe that the person doing it has your best interests at heart, but you aren’t always sure. A lot of people entrust the management of their money to others, only to later discover it was a mistake. 

Money management, however, is tricky. Doing it yourself often requires taking finance at the master’s level – and that’s not something that many of us have the time or inclination to do. 

So how do you figure out who you can trust? Check out the following advice and tips. 

Choose Somebody With A Fiduciary Charter

The word “fiduciary” sounds intimidating, but it is important whenever you look for a professional to manage your money. The word essentially means that they’ve taken an oath that means that they promise to manage your money in your interest. 

Many financial advisors, for instance, take a fiduciary oath to only provide you with financial information that benefits you, not them. The same goes for stockbrokers and other money managers. Their role is to align their interests with yours and ensure that they protect your property. 

Choose Somebody With A Good Financial History

Not all money managers are successful. In fact, a large proportion of them are downright disastrous for their clients, generating massive losses.

Searching through bankruptcy records and finding a person with a sound financial history is, therefore, essential. Try to avoid the mavericks and stick with people who regularly equal or beat the market. Even better, choose firms that promise to manage your money in-line with what the market does so you don’t wind up feeling gutted about missing out on gains. 

Choose Somebody With A Good Temperament

While some money managers look to make massive returns on unicorn stocks, they also take big risks.

Making money on winning stocks is much more challenging than the average person appreciates, thanks to the fact that there are so few winners. Virtually no stocks return 20 percent or more for ten years straight. Those that do are among the rare exceptions, not the rule. So picking them is incredibly challenging, if not impossible. 

Unless you have some kind of special insight, your best bet is to buy the market as a whole and allow your wealth to rise by more modest amounts each year. Find a financial professional who understands that investing is a long game and that it can take many years for all your scrimping and saving to pay off. 

Choose Somebody Who Warns You About Risks

Lastly, it is important to choose somebody who is prepared to warn you about the risks of your investments. Remember, no asset class is completely safe and secure. Stocks, property, and bitcoin can all go up as well as down, meaning that your wealth could fall if you choose to invest. 

The best financial professionals and money managers always tell you about the risk associated with your positions. If all you get are smiles and reassurances, then choose a different person to manage your money. 

Jeff Campbell

Jeff Campbell is a husband, father, martial artist, budget-master, Disney-addict, musician, and recovering foodie having spent over 2 decades as a leader for Whole Foods Market. Click to learn more about me

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