Lessons in Investing

Today I met with a financial adviser from David Lerner. I decided that I will not be using them as investment advisers. This is the third adviser I have interviewed so far.

I was actually late for my appointment. I was supposed to meet with him at 5:30 but got stuck at work late and forgot about it. I say David Lerner on the caller id of my office landline and believe I greeted the man with "Hi, oh crap sorry." I felt pretty bad I felt from the beginning this would not be the firm I went with as they tend to be very conservative and I am 26 years old.

I am greeted by a security guard who escorts me to a client meeting room. On my way in I pass by Mr Lerner myself and am a bit awestruck to stand face to face with a man who I've only seen on a website and heard on the radio. My impression of this man from a short meeting is that it would suit his ego nicely to have others awestruck by him. However, he will probably be upset when he learns tomorrow that I said no.


Mr. Lerner says I look lost, and I later found out he probably had mistaken me for an under dressed telemarketer under his employ. When the guard said I was a client he said then your definitely not lost. I explained I was a potential client and he said he owned socks older than me. His employees addressed his as Mr. Lerner and he oozed fiscal conservatism. He was the foil of the archetype coke head day trader.

My potential advisor sat me down asked me what I do and what my goal was. I explained I was a programmer and being young I was looki9ng for a little more risk than his average client. He then sat me down and showed me three of his companies products. First he shows me a REIT fund. Its all local US based stuff, most in the region, and places anyone in the area would have heard of. Not great returns at all, but I assume good for a reit fund. I really haven't looked at reit funds at all so I can comment. He then offers me the fund of the moment, the Large Cap domestic. These return numbers were in the range of 13%. He then shows me one of their guaranteed income products. It involves investing in Marriott properties and basically you get a guaranteed rate of return of 8% with some reasonable rules.

This is when I started talking. I said I would not want to invest in a reit, as its a buyers market,. I said the large cap was a bit to conservative as the last investor I talked to showed me one with an 18% return and I knew someone that used him and I knew this was typical of what he actually recommends Finally I said that 8% is far too low for what I want.

In the end I thanked him for his time and walked out. This was what I expected, but I didn't quite expect the events to fold in exactly this way. I informed the advisor of my age, income, etc and he should have realized that there was no need to offer me the 8% interest product. He could have offered me multiple large caps, and he should have offered me something high risk for diversity. It was a great pitch of I was 50, but not for a man of 26.

So whats the lesson learned here? Know your potential customer. Then again, maybe I'm the one that needs to learn a lesson. Maybe the lesson is when your David Lerner, and you build your business on fiscal conservatism, you rather turn away clients younger than your socks than risk your established customer base.