Best Financial Advisors – Avoiding Distractions

I saw a commercial while watching football recently.  A slightly clueless-looking customers steps out of the office of his Fidelity Investments advisor and is surprised by the bright green line on the sidewalk with a big white arrow on it.  “That’s the guidance you get from Fidelity”, soothes his financial advisor.  The client starts following the arrow as it traces out the path he should take, but pauses to look in the window of a car dealership, where his attention is caught by the new 2009 Cobra.  “Stay on the line!” chirps his advisor from the door.  The client regains his focus, and gets back on the bright green line, confidently striding ahead as he follows Fidelity’s arrow into a bright financial future.

My first thought was, “what a great commercial!  Fidelity’s people are the best financial advisors ever!”  There’s a lot I agree with in that commercial.  It’s important to have a plan and stick to it.  It’s important to avoid distractions along the road to your financial goals.  Buying expensive toys now instead of investing for the future is a distraction.  Then I realized what I had been missing.

Even the best financial advisors can be taken in by slick marketing.  But consider what the ad was really selling.  Fidelity Investments.  When you compare the Cobra to the investments this guy probably walked out of Fidelity with, he would have been better off buying the car.  Fidelity Magellan – the flagship mutual fund that Fidelity offers – was down well over 50% last year.  Even the Cobra didn’t lose that much value.

It’s important to have a plan and stick to it – the best financial advisors will all tell you that.  But don’t forget that it’s important to stick to a plan that will actually get you where you want to go.  Sticking to your plan is a bad idea if your plan violates the rules of Financial Gravity.  Following the line is exactly the wrong thing to do if it leads you to go against the commonsense ideas in the Diversity Trinity.  In those cases, the only smart thing to do is – get off the line!  Get out of single-product plans – like putting everything in one big money-losing mutual fund.  Get a new plan that will actually get you to your financial goals and then, by all means – stay on the line!