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The Biggest Investing Mistakes To Avoid Starting With Investing Through Your Bank

The majority of people looking to invest don’t necessarily know a lot about finances, investments, and the stock market. That’s fine, there are plenty of professionals who do and can handle your investments for you

While your first impulse may be to start investing through your bank, this is actually one of the biggest investing mistakes to avoid.

It’s a common investing mistake as your bank seems like the logical starting point and they will have dedicated investment advisors.

However, there are several issues that will persuade you to avoid investing through your bank. 

The Biggest Investing Mistakes To Avoid Starting With Investing Through Your Bank
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Fees

All types of investment handlers charge a fee, that’s how they make money investing for you. Unfortunately, banks traditionally charge higher fees than other establishments. There are likely to be fees for advice, fees per investment, and fees for changing investments or additional advice. 

In short, much of the money you gain will be swallowed by fees, assuming your portfolio does well and earns you money

 

They Are Not Always Thinking Of You

One of the most common investing mistakes is assuming the bank has your interests at heart. While many investment firms undertake what is known as fiduciary duty, banks generally don’t.

This means that investment firms are dedicated to investing your money and making decisions about your funds that serve your best interests. They can’t always get it right but they are trying to get you the best possible returns. 

Because banks don’t undertake a fiduciary duty their main focus is what is best for them, not you. In other words, they will sell you investment portfolios that make them money, regardless of how well, or badly, they perform. 

That’s why investing with banks is one of the biggest investing mistakes to avoid.

The Biggest Investing Mistakes To Avoid Starting With Investing Through Your Bank
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All Your Eggs In One Basket

You may have heard about putting all your eggs in one basket and this is certainly true when it comes to investing with a bank. 

If you invest with a bank it is likely to be your own. That’s where your funds are, your savings, loans, and other financial information. While there are protections in place if anything happens to your bank that puts everything you have at risk. That’s simply not good practice. 

 

Lack Of Training

If you ask the investment advisor at your bank you’ll be told that they are only capable of offering advice but the final decision is yours. This seems fair but it actually reflects the fact that most bank personnel are not adequately trained to offer investment advice. Their loyalty is to the bank and generating it money. 

You’re better off with someone who actually understands investments and will work hard to do the best for your funds. 

 

Lack Of Range

Investment markets can be volatile, potentially suiting those who want some risk in their portfolio. While this is beneficial, you need access to as many products and share options as possible to get the best returns. Banks generally have a limited range of options, depriving you of opportunities and potentially limiting the growth of your funds. 

 

Something Worth Considering

If you’re ready to start investing then the best option is to try a dedicated investment brokerage. They will charge a fee but they will also know what they are doing

There are plenty of options available. The secret is to find one with a good reputation. You can ask colleagues, family, friends, and even look on social media. It will help you to locate a reputable and reliable investment brokerage. 

The average fee for a financial advisor is 1%. For that, you should get the best possible service and expect to generate positive returns. It’s your money to invest, that’s why you should do your homework and ensure you have the right partner before you start. 

This will allow you to relax and generate the funds you deserve without investing with a bank.

 



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