Will you trust your wealth to financial advisers?

It's a straight up "No" for me.

I got a general distrust of the financial advisers and planners I have met so far. Generally, they claim to be able to help with your financial but end up trying to sell a load of financial products to me. This is the hallmark of the typical salesman.

Let's apply some common sense and see why I don't think all these add up at all.

1. Qualification and experience
   Slapping a CFA (Chartered financial analyst) certification on top of a salesman doesn't make things better. A CFA certificate is valuable in basic understanding of the financial markets but doesn't not mean that the CFA holder is able to help you to manage wealth.
   
   Things are worse when the financial planners are fresh graduates with little wealth management skills to speak of. Reciting lines from seminars and presentations does not imply true understanding of the subject.
   
   Further more, I find it hard to accept advice from someone without actual experience in managing wealth successfully.
   
2. Conflict of interest
   Having little true financial analysis skills, many of these people claim to have an army of researchers performing all forms of analysis to find the best product to ... help you instead of maximising profits for their company and to get a larger commission in returns.
   
   However the problem is that the advisers and planners is not independent and is inclined to sell products offered by their employer. With the majority of the financial advisers and planners coming from the insurance and funds brokerage and their resellers, it makes sense that they will be interested in selling various forms of their primary products to you.
   
   Think about it, the more risky or lousier the product, more commission is needed as an incentive to promote and push the hot potato to the customers. A good product needs little promotion. Do you need a salesman to tell you that the iPhone is a great product?
   
3. DiversificationOn the topic of investment, whenever some adviser or planner tried to discourage me from going into stocks and instead, diversify my risks my buying mutual funds, I always have this urge to ask them what is their understanding of diversification. In a nut shell, buying a couple of funds is not diversification, even it's across industries and countries.
   
   True diversification requires investment in difference asset classes, which are the following: equities (stocks), fixed-income (bonds) and cash equivalents (money market instruments), commodities and real estate.
   
   
   Putting all your money in mutual funds as your "investment" is generally a bad idea because the money is heavily vested in the equities and bonds market. Any shock to the economy typically sinks both of them together, albeit at different rates of decline. Any actual gains will be subjected to a million management fees conjured by the funds management. I got enough of the bullshit and took out every cent from these vampires.
   
   A FX coach, Thomas said this: "There is nothing mutual about mutual funds. They don't make losses when you do."
   
4. Making the sales pitch
   The financial planners and advisers I had met so far are quite a disappointment in this expect. The usual approach will be a courtesy call to arrange for a catch up session in an attempt to find out your current ability to purchase more of their products.
   
   Usually they will have this new great product(s) that they are offering and you should sign up immediately. It can be a insurance policy that you do not really need, an upgrade to your policy, a new fund etc.
   
   The data presented will almost try to put the product is a positive light but a fair comparison with a similar competing product will never be provided.
   
   The sales pitch for funds can be really bad too. There is no market timing involved. Market timing, an important and key factor in any profitable trade is played down as not important or hard to do. Instead, dollar cost averaging is advocated instead. This completely goes against the common sense of buying low and selling high. Why will anyone buy something close to the historical high? The risk of going down is so much higher and typically not worth the possible drawn down ahead to realise a possible tiny gain. Using a chart without showing 2008 data is as good as lying.
   
   Oh wait, does these guys actually know how to read a chart? We go into that next.
   
5. Charting
   I learnt that when dealing with anything to do with the financial world, charting is the number one skill required. For most of the general public, a chart with a positive trend line is all you need to know that the product is going to make you millions. Didn't everyone said that the trend is your friend? Unfortunately, that's also why so many people are losing money in the financial markets.
   
   Without going into details, let's stick to buying low and selling high. You need to know where was the historical low and high, and where you are now. If you are not sure where the market is now, get your favorite chart showing 5 years of data and get a 5 years old to answer you.

That sums it up my rumblings.

Disclosure: I had exited all my investments in mutual funds a couple of years back. Too much drawn down and a little net gain is not something I am interested in. I am a speculator in the spot FX and spot precious metal markets.