Are Your Investments Treated Like a Loyalty Card Number?

By Alexandr Bognat @ Adobe Stock

OK, you read here recently how Vanguard is the new BlackRock, and they are expanding the world of “big box store” investing. Vanguard, BlackRock, and others want to control everything you own. They want to control your investments, taxes, estate planning and more, and—of course—charge you for it.

But are you better off? You thought you were retired or soon to be retired, sitting on a beach in St. Somewhere when all of a sudden, you’re trying to keep track of what’s really going on.

Imagine you’re grocery shopping. You’re stuck in a faceless big box store. It’s a nightmare. The meat department isn’t talking with produce, and the bake shop doesn’t know you have a gluten allergy. The checkout guy is looking at the clock, not the gluten-free cupcakes in your cart, knowing exactly who they’re for. But it’s not his fault. His job is to get your rewards card number, not to spend time getting to know you. The guys upstairs know exactly what you spend every month, but they only know you by loyalty number 555666333. This is what’s happening with your money.

What will never be lost in the investment business is the importance of the personal relationship. You can’t buy trust with a loyalty card. Trust is earned. Loyalty cards save money. You decide what to buy.

Now, I’m not trying to be unfair to the big box finance guys. They’ve found themselves stuck selling commodities like zero-cost index funds. To survive, they bundle them up in target-date funds stuffed in 401(k)s, or they stuff your investments in them through their advice services. It’s like everyone’s got the same grocery list, making the same bland meal night after night after night. That’s no way to live.

Action Line: Don’t worry about the big box investing houses. They won’t starve. But do understand what’s going on. Don’t let them get fat off you. Push back a little.

“Cleanup on aisle six. We’ve got loyalty card number 555666633 asking for help.” When you want help escaping from the big box investment houses, I’m here. In the meantime, click here to subscribe to my free monthly Survive & Thrive letter.

Originally posted on Your Survival Guy.