Value of a Financial Advisor

[mickeyd]

Most of us are DYI folks so this will give you guys a heads up on the value that others place in their financial advisors~~~

Wealthy investors are also divided over whether having a financial advisor actually makes any difference. While 15% of respondents said their advisor was a huge help during the downturn and 31% said their advisor was at least somewhat useful, the largest proportion of wealthy investors, 44%, said having an advisor didn’t help at all, while 11% said having an advisor hurt them.
“This should serve as a wake-up call in the financial advisory business,”

Many Wealthy Investors Doubt Advisors’ Worth - Financial Planning

 

[Helen]

I can not understand why anyone would use a financial planner unless it was one that was paid by the hour.

We just went to one that I found through NAPFA. We haven't met to go over the report but I know she likes simplicity and low cost mutual funds. She was please we had a lot with Vanguard, but she doesn't care as much for Fidelity.

My partner and I both received inheritences recently so we have to totally revamp everything. The FP takes some pressure of both of us. I want my partner to hear someone echoing the things I have been saying. Also, if something happens to me she will have someone to work with.

I am thinking of having a commision based FP look over our portfolio once it is set up and show my partner what s/he recommends and how much it would cost us if we had used that type of FP.

 

[REWahoo]

I am thinking of having a commision based FP look over our portfolio once it is set up and show my partner what s/he recommends and how much it would cost us if we had used that type of FP.

I'd be concerned this would create doubts as to which of the two your partner should listen to, especially if the commissioned FP was especially charismatic (aka a really good salesperson).

 

[FinanceDude]

I am thinking of having a commision based FP look over our portfolio once it is set up and show my partner what s/he recommends and how much it would cost us if we had used that type of FP.

SO, you want to meet with a commission-based FP and waste his/her time with no intentions of using them anyways, just to impress your partner? Sounds like a barrel of fun...........

 

[jIMOh]

Good advisors are the ones which are in it for the people
the 44% of advisors who are in it for the money leave something to be desired IMO

I have also read reports where people with advisors are less likely to bail out at the bottom than DIY investors. That alone is worth the price if the advisor can prevent negative behavior.

 

[RonBoyd]

the 44% of advisors

And where did this number come from?

 

[FinanceDude]

And where did this number come from?

It's a number of conjecture, much like the info in the article.......

 

[W2R]

Wealthy investors are also divided over whether having a financial advisor actually makes any difference. While 15% of respondents said their advisor was a huge help during the downturn and 31% said their advisor was at least somewhat useful, the largest proportion of wealthy investors, 44%, said having an advisor didn’t help at all, while 11% said having an advisor hurt them.
“This should serve as a wake-up call in the financial advisory business,”

Why am I not surprised?

One of the most alarming "reality checks" of my adult life was when I realized that my own interests would be best served by learning about investing, instead of just leaning on an expert's advice.

 

[FinanceDude]

Why am I not surprised?

One of the most alarming "reality checks" of my adult life was when I realized that my own interests would be best served by learning about investing, instead of just leaning on an expert's advice.

That is good advice for all folks, but 75% or so would never commit to doing that.

 

[RonBoyd]

but 75% or so

 

[ziggy29]

That is good advice for all folks, but 75% or so would never commit to doing that.

91.8% of all statistics are made up.

 

[FinanceDude]

91.8% of all statistics are made up.

What is the old adage? "There's lie, damn lies, and statistics"........

There's a lot of armchair quarterbacking that goes on here with regards on how to invest............

 

[RonBoyd]

91.8% of all statistics are made up.

Baseball is ninety percent mental and the other half is physical. --Yogi Berra
​

 

[jIMOh]

And where did this number come from?

read the OP

44%, said having an advisor didn’t help at all,

 

[jIMOh]

Why am I not surprised?

One of the most alarming "reality checks" of my adult life was when I realized that my own interests would be best served by learning about investing, instead of just leaning on an expert's advice.

Agreed it's cheaper and safer to DIY and learn
however there is a time element to that, and some people would prefer to either not learn new things, or get help.

 

[Texas Proud]

I would agree that a FA for most everybody on this board... or the people who have found this board and learning... is a waste... most of the time...

Now, very few people know everything about investing, insurance, SS, estate planning and probably a few others.... but agood FA should know enough about each of these to help out someone who knows nothing..

Also, there are a lot of people out there that just don't have a clue... and will do nothing if someone does not prompt them to do it... my sister started her retirement investing from an advisor who roamed the halls and would get people to sign up for their retirement plans (they had options of which company would handle it).... their fees were not outrageous as there was a limit of 1.25%... but higher than most here would pay... I asked my sister about it a few years back and she said "heck, I would not have signed up if it were not for him"... so he earned his fee to get my sister off her butt and start investing...


One of the problems I do have with so called FA is that they are not... they are either mutual funds salesmen, insurance salesmen, or some other kind of salesman and only know their sales pitch.... they want to put you in their round hole no matter what shape you are in... and using a big hammer is acceptable if they can get you in there....

 

[Animorph]

No way would I trust an advisor with my money without learning enough to know if he/she was doing a good job. At that point they're redundant.

 

[FinanceDude]

No way would I trust an advisor with my money without learning enough to know if he/she was doing a good job. At that point they're redundant.

How do you define a good job?

 

[FinanceDude]

One of the problems I do have with so called FA is that they are not... they are either mutual funds salesmen, insurance salesmen, or some other kind of salesman and only know their sales pitch.... they want to put you in their round hole no matter what shape you are in... and using a big hammer is acceptable if they can get you in there....

Agree 100%. Every insurance agent in my area holds themself out as a "financial planner". When I ask how they do "financial planning", it usually involves annuities and life insurance...........that's NOT financial planning at its core.........

 

[73ss454]

How do you define a good job?

The market going up.

 

[FinanceDude]

The market going up.

Ah, the ole performance-based asessment, gotcha!

 

[73ss454]

Ah, the ole performance-based asessment, gotcha!

I figured you'd get a kick out of that. Most likely the truth though.

 

[M Paquette]

How do you define a good job?

Good question!

Are they consistently exceeding the after-tax return I would have gotten on a portfolio built with my modest knowledge after their expenses are taken out, with a risk profile I am comfortable with?

But that's just me. Other folks might be happy with any sort of return, and breakfast with their advisor twice a year...

 

[Midpack]

Agreed it's cheaper and safer to DIY and learn
however there is a time element to that, and some people would prefer to either not learn new things, or get help.

Until you find out how much most FP's charge, and that will renew your interest in DIY.

Unfortunately some people can't learn finance even well enough to manage for themselves, I work with quite a few...who have no hope of retiring (though they don't realize it).

 

[haha]

Many people would rather have R&R in Hell than have to attend to finances. This is hard for us to comprehend, because most of us actually like financial matters and the reasoning, the details and the math involved.

Also, under some circumstances it is easier to bring in an outside "authority" to unload some personal responsibility and deflect second guessing or conflict within the couple. Like bringing in a consultant at work. He costs a lot and he won't help, but then at least it will be someone elses's fault when things go wrong.

Ha