{ in·deed·a·bly }

adverb: to competently express interest, surprise, disbelief, or contempt


Stupid o’clock in the morning. The sound of drunken singing echoed through the window. I groaned and pulled the bedclothes over my head. It felt like I had only just got to sleep.

The singing continued. “Hey Jude”. Probably just another dribbling mess of a football fan, staggering home after watching the local team win. Or lose. The result never seemed to matter, just the alcohol and sense of tribal belonging.

I looked at the clock. 4am. Sigh.

How could I feel so exhausted already? I was only three weeks back from the Christmas break.

Rolling out of bed, I glanced out the window. A guy about my age sat on my front step, swigging from a half-full bottle of cheap supermarket wine. Wearing a rumpled business suit, not the traditional comedic football fan attire. He looked uncertain. Troubled. Lost.

Cracking open the window, I graciously inquired in the most diplomatic and eloquent vernacular of my homeland, about the gentleman’s mental health and general wellbeing. Then I politely suggested an alternate venue where he may indulge his passions for wine and song in more comfortable surroundings.

The volume of the singing increased. Sigh.

I headed downstairs, mulling over whether I should fill one of my kids’ water guns with orange juice or piss to expedite and incentivise the departure of my uninvited guest. Perhaps one of each?

I sensed movement as my foot touched the bottom step. A caramel coloured assassin shot out of the shadows. A hissing ball of teeth and claws attacked my ankle. The lockdown kitten, executing yet another well-orchestrated ambush. Mistakenly believing it was breakfast time. Destined for disappointment.

As I briefly considered hosing the ninja cat along with the serenading intruder, my phone began to vibrate in my pocket. It was my elderly mother calling. An unusual event at the best of times, doubly so given the hour.

She was having a minor panic.

The financial planning and wealth management firm she employed had gone broke.

She feared her retirement was in danger of being cut off at the knees. Visions of a poverty-stricken dotage, subsisting on cat food and unable to afford the heating ran through her imagination.

Intellectually, she knew that things should work out. Eventually.

In theory, the assets under management were all held in her name and client funds were ring-fenced from the firm’s own coffers. In reality, many holdings these days are on a nominee basis. Taking a while to untangle, assuming the firm’s record-keeping was more robust than their corporate governance.

The regulator would press-gang a competing firm into taking over the failed firm’s client book. A shotgun wedding, where the inbound clients would find themselves treated like unloved ginger-haired stepchildren. Second class citizens, with few alternative options.

Stung with high fees. Placed in uncompetitive products by default. The new firm had little incentive to show any love. The customers were already landed. Many of whom would soon move on regardless.

That the firm had gone broke was unsurprising. There had been a seemingly endless series of conflicts of interest, corporate malfeasance, miss-selling scandals, regulatory fines, and class action lawsuits. Yet still my elderly mother persisted.

The firm had been chosen by her late husband, who had handled all their money matters. Pride flattered. Ego stroked. Advisors had called him a “sophisticated investor”, as they steered him and many of his peers into high-risk high-fee investments that were typically operated by the firm itself.

A clear conflict of interest.

Unfortunately common enough that it barely raised an eyebrow, let alone rated a mention.

Listening to my mother talk about her fears was disheartening.

She wasn’t angry about the losses, nor the exorbitant fees charged for underperformance.

Instead, she feared losing access to her trusted money manager. The lovely young man who steered her into and out of investments with clockwork regularity, coinciding with the firm’s sales commission cycle.

Another fear was losing access to the “exclusive” investor seminars. Held at a high-end hotel, where “select” clients were briefed by sharply dressed advisors about what the markets would do next, who would win the next election cycle, and where the “smart money” was being invested. She understood little of the charts and slides presented, but enjoyed the complimentary champagne and canapé served afterwards. The invitation and venue choice providing bragging rights amongst her friends.

She also feared the gaze of the tax authorities. A carefully curated fear. One that the advisory firm stoked while charging a small fortune to produce documentation required to prepare her tax return. If the firm went under, what would happen to her records?

The taxman would be unlikely to accept “the dog ate my homework” as an excuse for incorrect filings or underpayment. She, just like the rest of us, was personally liable for the completeness and accuracy of any tax return submitted in her name. Which was fine while the trusted financial advisors kept all the records and produced all the paperwork. But a problem if the new firm simply started with opening balances and a blank slate in their wealth management platform’s transaction history.

My mother is a kind-hearted lady. She appeared more worried about how the employees of the advisory firm were going to pay their mortgages and feed their children than she was about her own position. As she spoke about the young advisor she regularly talked to, it became clear that the role he performed was more than simply providing financial advice. Just like a local doctor or priest, he appeared to offer a sympathetic ear. Assuaging fears. Taking the time to talk to lonely clients. Helping plan out the educating of grandchildren, or to plot an exit from an unhappy marriage.

Part guidance counsellor.

Part life coach.

Part therapist.

An invaluable service to those in need.

One for which his employer charged a hefty fee, under the guise of professional financial advice.

The truth is that my mother’s financial affairs probably shouldn’t require professional guidance at all. The red carpet treatment she received certainly wasn’t due to her account balance, but rather her value to the advisory firm as a walking talking dependable source of commissions.

That said, the fact that processing probate on my father’s overcomplicated estate has taken three years and counting is testament that there was an awful lot to simplify. Dozens of individual positions. Illiquid investments. Unlisted investment trusts and actively managed funds. Elaborate tax minimisation schemes. Self-managed pensions. Corporate trustees.

A broad but shallow portfolio. Embracing the spirit of diversification. Not out of caution or risk avoidance, but as a consequence of forever pursuing the latest shiny approach written up in one of the numerous financial newsletters he subscribed to or the recommendation of his previous trusted financial planning firm.

The same firm who, more than a decade after losing my parents’ business, has been sporadically sending refund cheques after being called out by the regulator for all manner of overcharging, miss-selling, and other dirty deeds spanning many years.

The refunded amounts totalled an eye-watering sum. Given only a portion of fees were being returned (plus accrued interest), I shudder to think how much they had actually been charged along the way.

After hearing my mother out, then talking her down, I suggested a course of action that she seemed agreeable to. Like any well-laid plan, it is unlikely to survive intact beyond first contact with the enemy, but it was a beginning.

As I ended the call, I realised I was now both thoroughly awake and less inclined to bring an abrupt end to the mournful singing outside my front door. Instead, I went outside and asked if the guy was ok.

It turned out he was having somewhat of a bad day.

A financial advisor himself, he and his team had been terminated by their employer in favour of a “roboadvisor” algorithm supposedly powered by artificial intelligence. Afraid of admitting the loss of his job to his family, he had bought the first of what appeared to be have been several bottles of wine, and headed for the river to drown his sorrows.

Eventually, he decided it was time to return home and face the music. There was only one problem, his key wouldn’t work in the front door. My front door. After asking his address, it became apparent that with his wobbly boots and beer goggles on, he had turned down the wrong street.

As I pointed in the direction he needed to travel, the man stood and lurched towards me with arm outstretched. I stepped back, not sure whether he was going for a handshake or a hug, but not interested in receiving either. Instead, he vomited out a spectacular torrent of pavement art all over my front step.

Sigh, no good deed goes unpunished. I should have used the watergun!

The man wiped his mouth on the sleeve of his suit coat, then staggered away in the general direction of home. Waking half the neighbourhood as he belted out yet another out of tune rendition of “Hey Jude”.

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  1. Ward Just 21 January 2022

    Wow – really makes you think about all these brokerages with their payments for order flow, back-alley deals with market makers, etc. What about the Blackrocks, Vanguards? Vanguard is moving aggressively into advice, etc. Greed eats brain usually. Just want to have my ETFs safe, responsibly care-taken (I know I’m the owner). ETFs are getting so fee cheap, will they then turn around after the blowup and say, „well, we weren’t making any money anymore. What did you expect?“ Do we now diversify into multiple brokerages, multiple ETF providers?

    • {in·deed·a·bly} 21 January 2022 — Post author

      Thanks Ward Just.

      Do we now diversify into multiple brokerages, multiple ETF providers?

      Yes, I think we do. It is worth identifying all the single points of failure in our financial setup and evaluating the risk and impact of each one being unavailable or inaccessible for a period of time.

      You probably already hold your current account at one institution and your emergency fund at another, so that if your account access gets frozen you can still pay the rent.

      You probably already hold credit cards from multiple providers, so that if one card gets blocked or stolen you can still buy groceries.

      You probably already diversify your investments across different equities, possibly via an index tracker fund.

      A natural extension of that existing caution is to ask yourself what happens if your providers experience difficulty, either just your account or business wide? Perhaps identity fraud or a ransomware hack. The individual instances can probably be unwound with time, but that won’t help much if the money that is now inaccessible was to pay your kid’s university fees or your parent’s nursing home care.

      Michelle from Fire and Wide tells a great yarn about losing access to her brokerage account for more than a year when her broker got into difficulties. That would be a tad inconvenient for an early retiree who finances their lifestyle by selling down equities based on a safe withdrawal rate.

      • Fire And Wide 22 January 2022

        Ha – it’s only a ‘great yarn’ now that it’s over….!

        Absolutely – for someone already FIRE’d like me it’s a no-brainer to diversify brokers / other income sources. A little inconvenience for much greater peace of mind.

        Btw – great piece per usual but my first thought on reading it…..was the drunk guy actually Boris ?. Sorry…!

        • {in·deed·a·bly} 22 January 2022 — Post author

          Thanks Michelle. Glad you weathered the inconvenience ok, and lived to tell the tale.

          was the drunk guy actually Boris ?

          Alas no, that would have made for a great yarn!

          The drunk guy looked like the stereotypical football fan we see staggering through my neighbourhood before and after every home game. Loud. Obnoxious. Mid 40s. Balding, with a buzz cut. Overweight. Beer belly. Glasses. Pasty white skin with a fluorescent light tan. The only real difference was he was wore a poorly cut grey business suit instead of a team jersey, and was drinking cheap merlot rather than overpriced lager or smuggled in real ale.

  2. weenie 21 January 2022

    Compared to some, my own investments are modest but I’m still diversified with multiple brokers. It would probably be more cost effective to lump all into one broker (the one whose fees are capped) but as you say, that single point of failure frightens me and would be a disaster if I relied on my investments for income. The same with bank accounts – have my main one but also a couple of others which I could call upon should they be required. There is the extra effort in keeping tabs on them all but it’s worth it for the peace of mind.

    Had a peek at my investments today and it’s a sea of red – since I’m DIYing, it’s all down to me but I can imagine the sorts of calls that financial advisors/brokers are getting from their high-fee paying customers! Time for them to earn their commissions haha!

  3. Bob 25 January 2022

    Have you considered a subsidiary blog for Lockdown Kitten.

    • {in·deed·a·bly} 25 January 2022 — Post author


      No. For two reasons.

      First, it would likely be far more successful than indeedably will ever be. Which would be tough on my ego and make the lockdown kitten even more insufferable than he already is.

      Second, the lockdown kitten’s resultant “influencer” star power would attract the same breed of crazies that scared the former Mr YFG’s guinea pigs off the internet.

What say you?

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