August 19, 2016
Is Your Advisor Selling Buggy Whips?

Yesterday I read that Uber is preparing to deploy its first self-driving cars within a couple of weeks in Pittsburgh, PA. They've partnered with Volvo to create the closest thing to an autonomous car that we've yet seen, although there will be a real human in the driver's seat to intervene if necessary.

Will we ever get the the point where cars are truly autonomous, moving passengers to and fro without any human input? Maybe not.  "Unless every object in the streetscape is fully automated, nothing can be."

But, that got me thinking about our industry.

Instead of progressing toward more autonomy and better advice, most people are still using financial advisors who are selling buggy whips. How do you know if yours is one?
  • If you receive regular emails detailing the recent market events, and predicting the short-term direction of the market, your advisor is selling buggy whips. Decades of research has taught us that short-term market movement is mostly random, and there's no reason why we should adjust investment portfolios based on this noise. We have a pretty good understanding of how different asset classes should behave relative to one another over the long-term , but that's not what the buggy whip salesman is talking about.
  • If your advisor is getting paid by anyone other than you , run, don't walk, as fast and as far as you can. Understanding how your advisor is being compensated is crucial to understanding who they're really working for. Buggy whip salesmen aren't getting paid by you; they're getting paid by mutual fund companies, insurance companies, etc. Instead, go to and find a fiduciary planner who works solely for you.
  • If your advisor can't explain to you how your money is being invested in a way that you can understand, in a couple of minutes, they might be selling buggy whips. Investing well is not that complicated, but remaining disciplined when markets go mad can be challenging. Advisors who are focusing on things other than broad diversification, low-costs, and tax efficiency are probably buggy whip salesmen in disguise.
Our industry has become far more autonomous over the past few years, as "robo-advisors" like Betterment and Wealthfront have emerged. Overall, this is a good thing (we partner with Betterment to manage some of our clients' assets). But, much like the truly autonomous car, clients are better off having a human who can intervene in their finances when necessary. 

These services do a good job with investing. But who do you go to when you have questions about paying off your house? Or saving for college? Or balancing retirement savings with saving for major purchases? Or figuring out how much you can live on in retirement? A computer can't tell you whether or not you can afford that yearly vacation, or whether your balance sheet is strong; that requires thought and input from an experienced planner, who can take into account all the potential variables along the way.

So, if your advisor is selling buggy whips in the world of semi-autonomous Uber, it's time to make the leap into the 21st century, and partner with an advisor who offers real advice.

The CAVU Team

David Sylvester, CFA, CFP®                                 
Founding Principal    

Nick Foy,  CFP® 
Portfolio Manager
  Hilary Disher, CPA (non-active)
Ta x Strategist

Plan well.  Invest Wisely.  Live Richly.
CAVU Wealth Advisors LLC