Safe Dividend Investing
In 2000, I lost $300,000 in mutual funds that an investment advisor had put my lifesavings into.... I lost it because I had entrusted it to an industry that does not educate investors nor encourage them to look closely at what that industry is doing with their money..... I set out to find a better, safer way to invest..... My podcasts relate to what I learned in creating a generous, reliable income and in growing my wealth.... A few of the more important lessons I learned and explore are:.... (1) It is critical that you become a self-directed investor.....(2) If you can not easily measure the risk and potential in an investment, then do not invest in it. This excludes from your portfolio bundled investment devices, like mutual funds, ETFs and Index funds,..... (3) Financially strong companies who have paid “good dividends” for decades will continue to stay strong and continue to pay good dividends because it is both part of their "character" and in their executives selfish interest.....(4) Diversification is critical. Investing equally in the best 20 strong dividend stocks is the ideal.....A portfolio of 20 limits your risk in any one stock to 5% of your wealth..... No matter how strong you think a stock is, do not fall in love with it..... I have lived very well off my steady dividend income for 18 years, through two market crashes and one pandemic. I have watched my portfolio’s capital more than triple from where I started, despite taking out a generous dividend income every year to live on... In charts, for my second investment book,(Safer Better Dividend Investing), I spent months scoring all 628 dividend stocks paying dividends of 6% or greater traded on the TSX, NYSE and the NASDAQ. I discovered dozens of stocks that can provide not only a generous dividend income but outstanding capital growth.....Financial independence is realizable for careful, patient, dividend investors.
Safe Dividend Investing
Podcast 265 - CAN INVESMENT ADVISORS BE TRUSTED?
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Welcome to Safe Dividend Investing’s Podcast # 265 on March 7th of 2026.
My name is Ian Duncan MacDonald, and I am the author of 7 investment books. My seventh investment book, Achieving Financial Independence Safely - 200 NYSE Stocks Analyzed and Scored" became available January 3rd on Amazon. You can easily find it by searching in Amazon or Google for "Ian Duncan MacDonald books". For more information on my other books and safe investing go to www.informus.ca
In this week's podcast I ask the question, "Can Investment Advisors be Trusted".
To generate enough income to live on an advisor must service and sell a hundred or more investors. The large financial institutions they work for provide bonuses and other incentives to push the investment advisor to exceed monthly targets. If these objectives are not achieved the investment advisor's job may be terminated.
Being an investment advisor is a stressful job. To survive it can result in investment advisors bending the rules. Some financial institution turn a blind eye to practices that are not only shady but pure theft. Before you turn over your life savings to an investment advisors consider the warnings in this podcast.
In my first investment book, "Income and Wealth from Self-Directed Investing" I went into detail in how an 80-year-old widow was not only robbed by the investment advisor in one major bank but also by the investment advisor in the second bank she had transferred her investment portfolio to. Her attempt to find an honest investment advisor had failed.
She then followed my directions and became a successful self-directed investor who was able to recover the hundreds of thousands she had lost as a full service investor with the two major banks.
I have been retired for 20 years and living very well off my investments. My high net worth continues to grow year-after-year along with my high income. I own no ETFs, no mutual funds or bonds. 100% of my portfolio is in financially strong, high dividend paying stocks. Even when the share prices declined in the market crashes of 2008 and 2020 my dividend income grew and was not impacted.
I select the stocks by scoring them. My background was in building large commercial risk scoring systems that rated millions of companies for banks, insurance companies and trade suppliers. To me stocks are just another form of commercial risk. My objective is to show investors how to safely invest.
Ian Duncan MacDonald
Author and Commercial Risk Consultant,
President of Informus Inc
2 Vista Humber Drive
Toronto, Ontario
Canada, M9P 3R7
Toronto Telephone - 416-245-4994
New York Telephone - 929-800-2397
imacd@informus.ca
Podcast 265
Safe Dividend Investing
7 March 2026
CAN INVESTMENT ADVISORS BE TRUSTED?
Greetings to investors all around the world. Welcome to Safe Dividend Investing’s Podcast #265, recorded on March 7th of 2026. My name is Ian Duncan MacDonald. I am the author of seven investment books. My latest book “Achieving Financial Independence Safely – 200 NYSE Exchange Stocks Analyzed and Scored” was available for delivery from Amazon on January 3rd. To learn about the benefit of my investment books, please visit my website www.informus.ca.. Alternatively, you can also do a Google search or an Amazon search for "Ian Duncan MacDonald books”. Reviews by readers and sample chapters are available at Amazon.
Would I trust an investment advisor with a million dollars that I might have accumulated over decades through careful savings or perhaps received as an inheritance or perhaps the result of the sale of a business I had built up over a lifetime? No, I would not.
Why? Because I am no longer a naïve investor. Now, as an informed, successful, self-directed investor I now know that I do not require an investment advisor to be involved in my investing. I came to this conclusion after losing almost half of my life savings by entrusting my portfolio’s management to an investment advisor. Since then, I have learned my loss was not unusual and that thousands of naïve investors have been similarly robbed. Many of them are not even aware of how the the loss of value in their retirement portfolios has happened. The large financial institutions pretend to be transparent and concerned about detecting the deception by the investment advisors they employ. However, he financial institutions potentially can often gain the most from these deceptions
Anyone approaching a financial advisor for the first time is in unfamiliar ground. They are intimidated by what they see as a superior being with knowledge and abilities far beyond their experience. With their suits and incomprehensible jargon, the typical financial advisor knowingly or not intimidates a new investor. The implication is that the new investor should shut up and give total control of their money to this supposedly trusted individual.
If the new investor were buying, let us say, a refrigerator they understand refrigerators and would not hesitate to closely examine their proposed purchase. They would ask hard questions to understand exactly how long it would take to get delivery, how it was to be financed and whether the vendor would haul away the old refrigerator.
Buying the services of an investment advisor should be no more intimidating than buying a refrigerator. It is the investor’s money at risk, and it is their right to confirm they are getting value for their money. They should not be intimidated by the person employed to sell that refrigerator.
The investment advisor is expecting to gain at least a $10,000 in income from the sale when they sign up a new investor. This is much more than the purchase price of a refrigerator but there is nothing stopping an investor from treating the investment advisor service agreement as if it were a very expensive $10,000 refrigerator purchase. An investment advisor is just another salesman selling a product. Do not be intimidated by the expensive suit and his pitch full of obscure financial industry jargon when he talks down to you. Make him explain every word and concept until you fully understand it.
You fully understand that no one works for nothing. Shouldn’t you be curious as to how your investment advisor is going to being compensated by the financial institution for convincing you to part with hundreds of thousands of dollars of your hard-earned investment money? Usually, you will be paying a minimum of 1% of the value of your portfolio to the advisor each year to manage your portfolio. To justify their time and effort investment advisors must target high net worth individuals. They are looking for those with million-dollar portfolios to manage to earn enough to live on. 1% of a million dollars is $10,000.
Why not ask the advisor how little of that $10,000 that will be taken from your account is going to your advisor and how much is going to the financial institution that employs them? Most of that $10,000 is most likely going to the financial institution the financial advisor represents.
Financial institutions motivate their advisors with incentive bonuses to pressure them into closing and maximizing sales. Should you understand how your advisor’s incentive system works and what impact it is going to have upon the management of your portfolio? Can this investment advisor be constantly chasing after new clients to gain bonus money and give your portfolio his full attention?
There is a saying in sales that you are only as good as your last sale. If the advisor fails to meet the financial institution’s minimum monthly sales objectives, the advisor will soon be terminated? If this were to happen to your advisor who will now manage your portfolio? This is not a remote possibility. Apparently 70% of all new hires for investment advisor positions fail to survive one full year. With older established investment advisors there is the reality that they will eventually retire and need to be replaced.
Although you may have signed an investment agreement to pay your advisor a total fee of 1% of the value of your portfolio each year, did that written agreement detail all other charges, commissions and fees that could be deducted from your monthly investment account without you being aware of it? Since the financial institution has total access to the money in your portfolio, they will just take what they feel they are entitled to. They are not going to bill you for it. Did you even take the time to go line-by-line through the investment service agreement you signed (yes, it is a binding contract)? If you did you should have seen a list of all deductions, they could take. You should expect to be paying them more than 1% of the value of your portfolio. You might also have noticed that the contract states the financial institution guarantees you nothing.
You are paying not just paying for the advisor’s “so-called-expertise”. You are also paying for his time. Ask on what dates during the year will the advisor agree to meet with you to explain in detail why your portfolio is gaining or losing money, plus address any new questions that you might have and to learn what new suggestions he might have on how to improve your portfolio’s performance. Since no specific times were listed in the agreement, was the investment advisor perhaps counting on you forgetting all the wonderful things he told you about in how he would manage your portfolio and make you rich? Let that advisor know how many hours of his time you think your 1% entitles you to. Get his agreement in writing. If you do not do this, you would be lucky to see him for an hour or two during the year.
If you are investing less than a million dollars, you should of course expect to pay much more than 1% of the value of your portfolio and of course expect the investment advisor to spend less time with you.
Signing the contract with the financial institution and turning your money over to them is quick and easy. It took less than 15 minutes for my life saving to be invested in mutual funds. Getting out of that contract and getting your money back is deliberately made difficult. The exit restraints and penalties are spelled out in their agreements. After all, the incentive money that was paid to the investment advisor who sold you the contract has to be recovered over time.
To sell you, the investment advisor probably implied he was wealthy. He may have bragged that he became financially independent due to his experience and wise investment decisions. He will tell you that the same experience that guided him will be used to guide him in managing your portfolio.
Most investors would be hesitant to entrust their life saving to someone who was full of hot air and was a failed investor? If he is so financially successful, why is he still working as a salesperson - which is what the financial institution that employs him considers him to be.? Will he show you his personal, last month’s investment portfolio’s statement to prove just how capable an investor he is? Would you be surprised to find out that you will have far more invested than the investment advisor?
Did your investment advisor agree in writing that every new investment bought or sold in your portfolio by the investment advisor would always be fully explained and justified to you in writing before it was purchased or sold?
Investment advisor’s can choose from thousands of mutual funds to put your money into. Before putting your money into a mutual fund did the investment advisor carefully go through the prospectus for that mutual fund. It details such things as what percentage of each stock the fund was invested in? Did he compare that prospectus to several other prospectuses of similar funds? If that mutual fund were to lose a third of its value did the advisor explain how you could sell that fund and what restraints or penalties, you would incur for then selling that fund? Did he also point out that the fund managers can change the make up of the stocks in the portfolio at any time and you have no control over these changes?
Unfortunately, through deception, undisclosed conflicts of interest, and omitting to explain the details in the agreements many investment advisors misuse their control of your investment account. Some can and do steal from clients. Their employers, who are often giant financial institutions seem to turn a blind eye to the game that is being played in their sales departments. Most inexperienced investors will be unaware of what is going on and will readily accept the explanations from the advisor that the shrinking investment account is just a temporary setback and this is all part of investing.
Investors like to believe they could not possibly be robbed because an advisor is legally required to put the client’s interests first. This is referred to as the advisor’s fiduciary duty. However, investment advisor’s with sticky fingers know that their chances of being caught are slim to none. The rich incentives given to them by their employers encourage them to take the risk.
A few of the more obvious ways they can rob their clients are:
1. Churning and unauthorized trading
This is where advisors needing more income will trade excessively in your account to generate trading commissions. They count on you not paying attention to transactions going through your account. If you gave them permission to buy and sell without your authorization you have little to complain about. This is called churning. Worse than churning is for the advisor to make unauthorized trades without the client’s permission.
2. Misrepresentation and omission
Every stock listed on a public stock exchange must supply audited financial information. To get an investor to purchase shares in an unprofitable, speculative company requires convincing the investor of the supposed tremendous potential of the stock. They stress how rapidly they know the share price will soon increase. The investor is assured they will become rich. Accept - that no one can accurately predict future share prices.
The experienced advisors know that the investment is a high risk and that the investor is most likely to lose their money. The investment advisor may be receiving a high incentive from a stock promoter to push what is a bad investment
3. Ponzi‑style schemes
The client turns his cash over to the investment advisor with the understanding that it will be invested in an extraordinary investment that will give a high return every month. Every month the investor starts to receive these returns. He encourages others to also invest in the scheme.
However, the money was neve invested. What the Ponzi promoter is doing is taking a portion of the money from every new investor and paying the earlier investors from it what they expected to receive each month. They think their investment is safe and how clever they were to get into this investment.
Everything can go along fine for years until some investors decide to cash out of the scheme and not enough new suckers can be found to cover the missing amounts in the accounts that are going to be closed out. The scheme collapses and hundreds of millions of dollars can be easily lost by the investors. The crooks running this Ponzi scheme can go to jail for decades.
I am sure there must be some honest investment advisors out there who are not greedy con artists. However, when involved with any investment advisor be on the alert for any of the following warning signs.
(1) Is he pressuring you to act today on this exclusive investment opportunity or your chance to get rich will be lost forever.
(2) You are told that you will double your money within months. A 10% increase in the value of your portfolio is possible in a year if you choose your stocks carefully. Doubling your money in a year smells like a con.
(3) You can realize a 6% to 10% annual return from a stock’s dividend yield. However, when you are told to expect a 20% to50% return you are most likely being conned. In lending your money you are doing well if you can get a 3% to 5% return from a legitimate financial institution. When you start being offered a 20% return for lending money it too smells like a risky con.
(4) Walk away from any money transaction if documentation is not going to be provided to verify the terms, the return and the fees involved.
(5) If for no obvious reason you can not access funds that a financial institution is withholding, you must immediately escalate your demand for immediate payment to those in authority at that financial institution or the Security Commission. Speed is of the essence if you hope to recover your funds.
(6) When an advisor discourages you from checking what has happened to your money you should immediately escalate your investigation.
How does investment fraud succeed? The advisors have the experience in running the con and they have control over what information is visible. They succeed because too many clients blindly trust their advisors and don’t aske questions.
An advisor tries very hard to appear to be your trusted friend. However, an advisor is not a friend. Recognize that you are one of probably a hundred of more clients who contribute to his earning. Every year he loses clients through normal attrition. They must be replaced. There are only so many hours in a day for him to seek out new clients and to also retain his existing clientele. It can be a hard, demanding, stressful job.
My advice for those who want to invest in the stock market is to become self-directed investors like I did. Entrust no one with your money but yourself. Very carefully select 20 financially strong companies paying high dividends greater than 5%. Live within that dividend income, sit back, relax and watch the value of your portfolio and your dividend income grow each year for the rest of your life. You could save yourself hundreds of thousands of dollars that you have paid an investment advisor over a lifetime.
To start, go to my website www.informus.ca. It lists my investment books. Any of these 7 books will take you step-by-step through the process of finding good stocks to invest in and then walk you through the process of acquiring them and managing your portfolio. You will quickly realize that it is not difficult to build a financially strong portfolio that will provide you with an ever-growing generous income.
That’s all for this week.
The End