I read a great article this morning by Simon Russell from Professional Planner about how the Advice industry needs more Jedis, with fewer mind tricks.
Simon calls for less inquiries into the advice industry, less regulatory change from the policy makers and more advisers who are well drilled in understanding the mind of clients. This would result in more Australians taking up adequate planning for retirement and reduced incidents of poor investment decisions.
“Careful you must be when sensing the future … the fear of loss is a path to the dark side,” Yoda says to Anakin in Episode III: Revenge of the Sith
Have you ever experienced a loss aversion and the regret that accompanies it, means you are more likely to stick to default options rather than making pro-active decisions about your retirement. That’s why the number of disengaged super members in default super plans is so high. It also means you are prone to hold onto losing investments too long, or worse, to throw good money after bad in the hope of recouping our losses. SOUND FAMILIAR? These effects contribute to investor under-performance.
DALBAR has been analysing investor returns compared with market averages in the US for a long time. Since it started researching in 1984, equity investors have under-performed the market average by about 7.5 per cent per annum. To put that in perspective, $500,000 invested in 1984 and accumulating at the market average rate for 30 years would now be worth about $11.8 million. In contrast, the average equity investor would have achieved $1.5 million – a staggering $10.3 million less.
Perhaps its time you spoke with the team at Perspective Group (http://www.perspectivegc.com), who make it their business to understand your mind, put it at ease and work with you to prevent poor decision making and investment decisions. Perspective Group is unique in the industry because they educate their clients to empower them to make informed decisions about their financial future. With knowledge comes power and Perspective Group enables clients to have this power, while also providing strategies for wealth creation that will give them the freedom to create the life they have dreamed of.