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Originally Posted by
Roger
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I disagree. If one of the big accountancy firms who have access too all the records and do a full audit and are happy with the veracity of the financial statements and attest to that, how would you expect a small financial advisory firm without access to the companies internal documents to get a better feel for it ? We are not mind readers mate nor do we have access to documents like the auditors do.
The role of some of these large accounting firms is questionable. Posters on this thread threw more light than the auditors.
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Surely financial advisors should at least in theory be able to draw some comfort from the credit rating agencies ?
Some comfort yes but these ratings enable advisors to get too comfortable
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how would you expect for example a small suburban financial advisory firm to do better with special insights without access to detailed company records ?
I would expect the small suburban advisor to stay out of deep water where sharks lurk
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On the other hand you would expect if for example a finance company had a high degree of concentration in one specific risk area like related party transactions, a disproportionate level of lending to the property development sector that finance company might be perceived as having a higher level of risk than some others and perhaps a lower level of investment in that company might be considered prudent or if there were specific risks identified that the financial advisor wasn't comfortable with (s)he might not recommend them.
Related party lending should be a big red warning flag - I would expect an advisor to be very wary
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The idea that financial advisors are out there to prey on the lazy and vulnerable is in my opinion a gross generalisation and misrepresentation of the business model of the vast majority of financial advisors.
Accepted. A gross generalisation which I retract. I should be more focused on a business model which relies upon a certain method of income generation and the maximisation of opportunities to increase that revenue.
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In a heck of a lot of cases I think investors are simply taking a "shotgun approach" to potential liability issues and hoping some of the pellets hit the mark somewhere. I guess its only human nature that their personal point of contact, (their financial advisor) is in line for some of that flak but is it warranted... A simple case of many people wanting to shoot the messenger ?....I think so.
I think too many investors don't do their due diligence on their advisor. I'm trying hard not to call them lazy. But really, I'm not sure why people blindly entrust their hard earned cash to these so called advisors. Case in point - how is it that forsyth barr are still around?