I’ve clearly done my job too well. After years of telling my clients to ignore every new innovation that comes about, every tech-enabled investment or money management tool that promises to make their life complete, I’ve made it incredibly difficult to convince them that managed accounts are a good idea.

I tried to extoll the virtue of our managed discretionary account proposition to Mavis, a wealthy widower with a nicely diversified portfolio of investments it took me years to shape. She didn’t understand why we were having the conversation.

“Dixon, I like the investments I have now,” she said. “Why would we change them all?”

“Agility,” I replied. “If Trump puts his finger on the button, Mavis, your holdings would have already halved in value by the time I got around to calling you, and all my other clients, to get approval and dial the risk down. With our managed discretionary account, you give us the authority to make changes and we let you know after the fact.”

“Oh,” she said. I watched her look at the pot plant on the table, trying to decide which was the lesser of two evils; having her portfolio torn asunder by Trump or letting people make changes to her portfolio without her transactional permission.

“Our investment committee also provides oversight and makes regular small changes to the portfolio for asset allocation and rebalancing purposes,” I continued, “adding up to one and half per cent on your returns every year.”

“Right,” she replied. “Sounds good.”

“Great then…” I ventured.

“I think I’ll keep things as they are, though,” Mavis said. “Just to be safe.”

“You don’t feel safe investing in managed accounts, Mavis?” I asked.

“Well, I remember you told me once not to invest in something I didn’t understand, Dixon,” she said.

“I did. Warren Buffett.”

“Yes, well, I don’t understand managed accounts,” she said.

Her reasoning was inarguably sound. The lady didn’t want to put her life savings in something she didn’t comprehend precisely because I’d spent the last 16 years telling her not to. Anything that sounded too good to be true probably is, I had said. And here I was trying to explain that managed accounts were the best new way to invest your money.

I’d spent years coaching Mavis to be afraid of monsters, and now I was asking her to invite them in for tea and biscuits.

I considered another tack.

“Mavis, do you really understand how the television works?” I asked.

“No Dixon,” she replied. “Do you?”

“Lord, no. But I trust my flat-screen television to do its job. The same thing applies here. What I’m saying is that sometimes don’t need to understand every facet of something to know it’s a good solution.”

“Oh,” she said, eyes once again resting on the pot plant. “I guess if that’s the case, we should probably look at investing in bitcoin then. I still don’t understand that either, but the internet calls it a sure-fire winner. Are you saying I should do that as well, Dixon?”

Bested, again, I sighed and let my own eyes fall to the plant on the table.

“No, Mavis. You’ve made your point.”

Dixon Bainbridge may be contacted by email only since his phone was disconnected - and it's best to try in the mornings. The views expressed in this column are not necessarily those of Professional Planner, and not even necessarily grounded in reality, to be frank.
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