Not benchmarking a review of past performances

Many financial planners will show you past performances of their financial products, with seemingly impressive returns. However they may also leave out the median performance of their peers during the same time. The median performance may show that all investors had similar returns to theirs. Benchmarking past performances will bring this to light.

The chart shows the cumulative performance of an Australian sharemarket product from a financial planner that had a superficially impressive total 160% return over 5 years.

However they may omit to mention that the median investor had a similar return, as shown by the chart below!

This puts the product performance in a proper perspective.