It’s no secret brokers are often given incentives to steer client funds toward certain financial products. That’s not to imply that all suits are snakes, but there’s a risk that comes with entrusting your entire portfolio to a third party.
Enter Jemstep, one of the latest personal finance tools to give consumers an edge when it comes to managing their investments. Much like Personal Capital, Jemstep offers investors the chance be sure they’re money is working in real time – and take action if it’s not.
“We’re not looking to break those investor relationships with (customers’) broker,” explains Simon Roy, EVP Corporate Development. But “at the end of the day, managing your investments is a lifelong mission. As much as it’s tempting to hand it over to a third party, individuals are way better served becoming more informed and having more control.”
Once you’ve linked all your accounts to Jemstep, the site pumps back information on your progress–from which funds are duds to recommendations on alternatives. But what happens if you, like Roy’s own sister, realise your broker hasn’t been picking funds in line with your best interests?
Here are three ways Jemstep can help you find (and deal with) the warning signs:
1. How hard is my money working for me?
Per Roy: “Once the investor links their accounts with Jemstep, they will be able to see how much money they have working towards their goal and how their current investments have performed compared to the relevant index.
This will help them answer the question, ‘Overall, how well has my portfolio performed compared to relevant market benchmarks?’ This feature also answers the question, ‘How would what I hold today have performed over the last three or one years?'”
If that red arrow is pointing downward, something’s probably up.
2. Which funds aren’t the right fit for me, and are there better funds?
Per Roy: “After the investor answers the Quick Start questions and links their investments, Jemstep automatically reviews them against all the other funds in the same category; shows how they stack up (rank #); and recommends what investors should consider selling, buying and keeping.
As you can see from the screen shot, we highlight which ones are a really bad fit for them. These tend to be really weak performers that often have high fees relative to the available alternative funds. We also provide an overview of some of the key attributes of why Jemstep’s recommended fund is a better fit.
Investors can review the information on this screen with their broker and have a conversation about the criteria used in the selection of these funds, and possible alternative funds that may be better-suited to them.”
Why are these not the right funds for me?
This is where you compare your funds against Jemstep’s recommendation. It tells you exactly why it’s suggested an alternative, and you can click through for details on fees, expected return, and risk.
“At the summary level and by drilling deeper, the comparison provides the investor with specific information to discuss with the broker as to why the fund may not be a good fit for the investor,” Roy says.
“If the broker suggests alternative funds, the investor can enter the funds into Jemstep and review them in real-time with the broker using Jemstep’s personalised, objective information and rankings.”