....The main reason to have these folks is that they counsel you not to sell when the market goes real bad. If you can handle that, you don’t need them. If you can’t, they are worth their weight in gold.
Exactly; that is the key. The average investor is NOT like most of the folks here. I worked for a couple of years in the office of a guy who was probably the top-ranked independent CFP in our locality. Semi-retired; had fired 80% of his clients (yes, you read that correctly) about a year before I joined, as being more trouble than they were worth (80% of the service time used by staff, but only 20% of the total assets under management).
Also terminated were clients who had been consistently rude and obnoxious to staff members.
He provided a really impressive amount of hand-holding to the clients who needed it....and there was a fair # who did, because they were long-term clients whose spouses had died. And it was invariably the dead spouse who had handled all the money, leaving the surviving spouse with little expertise in financial planning.
He put it very succinctly: "Half my clients, I have to tell them they have more than enough to spend on themselves now. The other half, I have to keep from spending more than they should!"
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Early on in this thread, someone said something about 'investors who panic, they might be helped by using an advisor'.
I happen to be good friends with someone who fits that description perfectly. We share investing and financial articles all the time. We've known him for more than 40 years.
We have also watched him make consistently wrong, emotional panic-driven decisions on finances. The only thing that has saved him is he's very successful at his career as an independent tech developer, and he manages his business extremely well.
As an investor he knows what he's doing, so long as things are going well. But when the media goes headline-hungry and "everybody" yells "the sky is falling!!"......well, he panics.
And so on the last debacle, he sold off his entire portfolio in March 2009 - almost to the day when hindsight later declared
the stock market's lowest point.
Of course he did not, as Buffett did and I'm sure some folks here did,
get back into the market when it was cheap. No, he waited.
And waited. And waited some more....yes, completely missing the rebound.
Later on, I met someone who did something even worse. She took her funds out at the same time, but
stayed in cash until 2018!
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I use an adviser - an independent CFP (who in fact trained 30 yrs ago with my old boss). I handled all our investments for decades, but once we retired I didn't want to keep doing it. It's a different ballgame when you retire, and it's worth it to us to use an advisory firm.
You don't use a CFP to get the latest/greatest/hottest stock or fund. If your adviser isn't looking at your financial situation in an individualized, holistic manner, s/he is a generic hack and yes, you're better off doing it yourself. Like I said, I did that myself, and was reasonably successful at it.
We use an adviser for the same reason we use an estate attorney to draw up our legal docs instead of doing them through Nolo Press or LegalZoom. Because in our
personal, individual circumstances, it is worth paying for expert advice.
It's fine if you want to DIY, whether it's investing or car repair or lawn mowing. Just remember, however, that sometimes it's critical to know
the right questions to ask - because there will be times when what you don't know, and thus don't ask about, will put you and your heirs at a disadvantage.
