Stock Brokers
It is important to understand that stock brokers are typically transactional in nature. They make their money from a client either buying or selling. On any given day they may tell you what might go up or down and if there is a new issue they may send you an update. However, it should be clear that this is not portfolio management.
One of the more common complaints is that while they will help you buy they will not necessarily tell you what you should sell or when you should sell it.
Where the size of the portfolio dictates more attention or where they are specifically charging for it, stock brokers will build and manage portfolios in a disciplined fashion. This is essentially what Endeavour does and we believe it works well.
However for the same reason that fund managers shy away from managing overseas investments themselves, most stock brokers will only provide you with a regional portfolio of mostly New Zealand securities.
This is limiting, particularly if you firstly question whether New Zealand is the best place for the large majority of your investments. If the answer is ‘perhaps not’ then you should be looking to make changes.
In addition, unless they cross over into financial planning, most stock brokers will not consider any of your wider issues or situation. This is important as it can significantly change the investment advice offered.
We like how some stock brokers build portfolios but generally it is hard to know where you rate in a stock brokers' time and whether they are considering you and your investments as they watch markets change and shift.