How to Choose the Right Financial Advisor

We all have different levels of risk tolerance. But how is that risk measured for complex investment strategies like covered calls? And how can you be sure it's an accurate reflection of reality? For the first portion of today’s episode, we provide a detailed breakdown of everything you need to know about covered calls and why there is no perfect model for assessing risk-adjusted returns. We examine how incorrect measures of risk can make covered calls seem more attractive, what investors need to know about covered calls, and the fees, costs, and taxes you should be considering with these types of strategies. Next, we are joined by lifelong friends and colleagues Jonathan Hollow and Robin Powell to discuss their new book How to Fund the Life You Want: What everyone needs to know about savings, pensions and investments. They describe how their shared passion for financial education motivated them to write their book, before explaining how readers can best use the accompanying workbook to identify and reach their financial goals. Robin and Jonathan then go on to share their advice on day-to-day money management, finding a trustworthy advisor, and why it’s never too early to teach your child about money. Tune in for a detailed breakdown of covered calls and how to make informed decisions about your investments and finances!

Key Points From This Episode:

• An introduction to the concept of covered calls. (0:02:41)
• The definition of covered calls, how risk can be measured incorrectly to make covered call strategies look more attractive, and why risk can never be destroyed. (0:04:22)
• A breakdown of the assets involved in covered calls and why their yields can be misleading. (0:07:00)
• Why there is no perfect model for assessing risk-adjusted returns and what can be learned from looking at investors through a behavioural lens. (0:16:19)
• An overview of why fees, costs, and taxes are major considerations for these types of strategies. (0:20:15)
• Introducing Robin Powell, Jonathan Hollow and their new book How to Fund the Life You Want. (0:25:08)
• Jonathan and Robin’s long friendship, their shared interest in financial education, why they saw a need for their book, and how readers can get the most out of their workbook. (0:30:45)
• Insight into the six rules that Robin and Jonathan outline in their book and the eight keywords that they set up for managing money day to day. (0:35:07)
• Advice on how to keep up with finance news, including what you should pay attention to and what you can ignore. (0:40:37) 
• The importance of a day-to-day savings habit and suggestions on what kids should be taught about money. (0:43:20)
• Advice on how to find a first-rate advisor based on your needs and what questions you need to be asking of them. (0:49:54)
• How your financial advisor should act as your financial bodyguard and complement your weaknesses. (0:56:02)
• Ben and Cameron share news about their next podcast appearances, Rational Reminder education courses for financial advisors, and upcoming meetups. (0:57:43)
• Learn about the webinars that Ben and Cameron have been hosting and how you can sign up. (01:03:00)

Links From Today’s Episode:

Robin Powell on LinkedIn — https://www.linkedin.com/in/robinpowell/

Jonathan Hollow on LinkedIn — https://www.linkedin.com/in/jonathanhollow/

How to Fund the Life You Want: What everyone needs to know about savings, pensions and investments — https://www.amazon.co.uk/dp/1399404601/

Covered Calls — https://www.investopedia.com/terms/c/coveredcall.asp

Episode 27: Robin Powell: Evidence Based Investing: Changing the Minds of Advisors and Investors — https://rationalreminder.ca/podcast/27

Patrick Boyle on YouTube — https://www.youtube.com/c/PatrickBoyleOnFinance

Sharpe Ratio — https://www.investopedia.com/terms/s/sharperatio.asp

Sortino Ratio — https://www.investopedia.com/terms/s/sortinoratio.asp

S&P 500 — https://www.spglobal.com/spdji/en/indices/equity/sp-500/#overview

Episode 167: Prof. Hersh Shefrin: Fear, Hope, and the Psychology of Investing — https://rationalreminder.ca/podcast/167

‘Behavioral Aspects of the Design and Marketing of Financial Products’ — https://www.jstor.org/stable/3665864

Episode 171: Prof. Campbell R. Harvey: The Past and Future of Finance — https://rationalreminder.ca/podcast/171

‘Portfolio Performance Manipulation and Manipulation-Proof Performance Measures’ — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=302815

Adviser 2.0 — https://www.advicereinvented.com/

Sensible Investing — https://sensibleinvesting.tv/

Financial Times — https://www.ft.com/

Rob Carrick — https://www.theglobeandmail.com/authors/rob-carrick/ The Globe and Mail — https://www.theglobeandmail.com/

The Money and Meaning Show — https://podcasts.apple.com/us/podcast/the-money-and-meaning-show/id1449894787

The Most Hated F Word — https://themosthatedfword.com/

New Self-Regulatory Organization of Canada — https://www.newselfregulatoryorganizationofcanada.ca/

FP Canada — https://www.fpcanada.ca/

Rational Reminder Continuing Education — learn.rationalreminder.ca

PWL Capital — https://www.pwlcapital.com/

PWL Capital on YouTube — https://www.youtube.com/c/Pwlcapital-Montreal/videos

IAFP Symposium — https://iafpsymposium.ca

Burt Malkiel — https://jrc.princeton.edu/people/burton-g-malkiel

David Blanchett — https://www.davidmblanchett.com/

Meir Statman — https://www.scu.edu/business/finance/faculty/statman/

Nick Maggiulli — https://www.linkedin.com/in/nicholasmaggiulli/

Jill Schlesinger — https://www.jillonmoney.com/

Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582. Rational Reminder Website — https://rationalreminder.ca/ 

Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/

Rational Reminder on YouTube — https://www.youtube.com/channel/

Rational Reminder Email — info@rationalreminder.ca Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/ 

Benjamin on Twitter — https://twitter.com/benjaminwfelix

Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/

Cameron Passmore — https://www.pwlcapital.com/profile/cameron-passmore/

Cameron on Twitter — https://twitter.com/CameronPassmore

Cameron on LinkedIn — https://www.linkedin.com/in/cameronpassmore/