So-called “smart-beta” strategies hasn’t been all that smart lately – at least not for the last five years. This article will examine why, whether it was predictable and the likelihood it will work better going forward.
As a CFP and registered investment advisor, I’m bound by law to act as a fiduciary to my clients. Yet the CFP Board and SEC, overseers of the standards that guide fiduciary responsibility, aren’t always serving the investors they are intended to protect.
Much as I want to know the future, I’ve long since recognized the dangers of our addiction to predictions, which are usually heralded by so-called market gurus. I’ll give you seven surefire ways to spot those purveyors of bad advice, but first let’s look at a far more useful set of forecasts.
I’ve seen many positive changes in the advisory business over the past three decades. Fees have gone down and diversification has gone up. Advisors are a large part of the reason flows are moving from expensive active to low-cost passive funds. This has been good for our clients. Still, we have further to go, and having advisors address these 10 failures in their practices will help us get there.