An Advisor and His Client

A portfolio in distress and why some individuals may benefit from a financial advisor

I was reading the Investor’s Chronicle¹ last weekend and came across an article titled ‘How do I grow my £118,000 portfolio and retire early?’. I usually skip the financial planning & education segment of this publication, but found myself second-glancing at the piece because of the bemusing composition of the individual’s portfolio. Investors tend to exhibit a level of financial ethnocentrism when it comes to discussing how others ought to invest their money. Those who approach matters with a rational mindset understand the folly of such a narrow view; there are many roads to Rome. There is a spectrum of behaviour amongst individual investors. This spectrum does not represent a linear progression from “wrong” to “right”; it's a range of distinct yet interconnected states, where each point embodies a unique set of characteristics and values.

On one point of the spectrum, we find investors who Yolo into derivatives on momentum stocks, lose everything², and lament the market as being rigg…