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Right but how is an FA going to help with that? Wouldn't these emotional people just pick up the phone and tell their FA to sell sell sell?
The fa could/should have a financial plan in place that outlines appropriate risk and an asset allocation to match. Then when a client calls and is making a poor, emotional request contradictory to the plan the fa can then reiterate the plan, explain the issues with taking emotional actions. More often than not poor choices are avoided in this route. Truthfully just having to call someone ie an advisor and make the request is often enough to prevent the call in the first place. Can the client still demand poor moves? Sure but the frequency is cut down tremendously
I agree with Low; most people, as in the majority of the population, don't really have much clue as to what an IRA is vs 401k vs 529 vs money market vs brokerage vs checking account.
It's quite scary the lack of financial knowledge that exists out there, and an advisor is worth their weight in gold for these people (the vast majority).
That being said the banks from what I've seen personally do not offer good products and as such people tend to mistrust them. This needs to change. Your bank and advisor should be like a trusted family member and right now most people just think banks are out to "get them".
Let's not forget that most financial advisors won't even speak to people unless they have a certain amount to invest.
The average Joe putting up $200 a month on dollar cost averaging won't get a return phone call from a FA.
I also have a sizable account with Vanguard. I've never received calls from them, but I have certainly received emails inviting me to try out their personal adviser services.
We were "assigned" a PA when I rolled DH's pension annuity over into an IRA. The annuity needed an account number in order to execute the transfer and DH didn't have an open account with Vanguard. The PA set me up and then called me when the transfer was complete to make certain everything was correct. When he called about six months later, I told him thank you but no thanks. He hasn't called me since, which I appreciate.
Cool story but there is a high probability you would benefit with more frequent contact with an advisor even paying them vs your maybe once every five years
Nope. I'm not sure why you think there's a "very high probability" I would do better with an advisor. I'm a pretty prudent investor with my sights firmly on the long haul. I used to have a position (tax advice) in which I saw a lot of brokerage statements, mostly of elderly folks. The amount of account churning and wacko financial instruments that were only owned for a few weeks or months before being sold, almost always at a loss, is appalling. Then on top of that there's the account management fee, often several thousand $, buried in the fine print somewhere -- all so that the in-house financial advisor can make a very nice living selling junk to retirees.
No load index mutual funds or ETFs is the safe & stable way to go.
Nope. I'm not sure why you think there's a "very high probability" I would do better with an advisor. I'm a pretty prudent investor with my sights firmly on the long haul. I used to have a position (tax advice) in which I saw a lot of brokerage statements, mostly of elderly folks. The amount of account churning and wacko financial instruments that were only owned for a few weeks or months before being sold, almost always at a loss, is appalling. Then on top of that there's the account management fee, often several thousand $, buried in the fine print somewhere -- all so that the in-house financial advisor can make a very nice living selling junk to retirees.
o.
I think there’s a very high probability because well it’s accurate. Your one checking maybe ever 5 years is woefully insufficient to stay on top of things. You can choose to go your own way I have zero problems with that but to think that someone who does this everyday couldn’t provide any benefit just isn’t inline with reality. Like I said study after study shows people despite their knowledge set fail time and again by making bad emotionally driven decisions.
Quote:
No load index mutual funds or ETFs is the safe & stable way to go
That’s great but it’s only a small piece of the total picture
[quote=Lowexpectations;55425033 Like I said study after study shows people despite their knowledge set fail time and again by making bad emotionally driven decisions.
[/QUOTE]
Lordy, how I do hate those offhanded "studies show" arguments! Got any cites?
Of course SOME people make bad emotionally driven decisions. Is it MOST people? I don't know. The instances I saw were more a matter of not understanding or caring what was happening in their portfolios & being WAY too trusting of in-house "financial advisors."
Lordy, how I do hate those offhanded "studies show" arguments! Got any cites?
Of course SOME people make bad emotionally driven decisions. Is it MOST people? I don't know. The instances I saw were more a matter of not understanding or caring what was happening in their portfolios & being WAY too trusting of in-house "financial advisors."
the morningstar small investor returns stink in comparison to what the funds got , so overall the bad decion making is enough to effect almost all funds
Lordy, how I do hate those offhanded "studies show" arguments! Got any cites?
Of course SOME people make bad emotionally driven decisions. Is it MOST people? I don't know. The instances I saw were more a matter of not understanding or caring what was happening in their portfolios & being WAY too trusting of in-house "financial advisors."
Well I posted the vanguard paper and as mathjak said Morningstar has investor returns vs fund returns. It is most people not just some or a few. I’ve worked with thousands of advisors and tens of thousands of clients over a couple decades so the amount of real data I’ve seen is pretty extensive
Just thought I would share this to the thread. Received an email today from WF soliciting robo investing services. It read:
Quote:
This is you investing like a pro
This is low-cost, automated investing
With Intuitive Investor®, there’s no need to constantly check the market. You can invest like a pro with no expertise necessary because it includes:
A diversified portfolio recommendation based on your financial goals
Low-cost investing with a flat advisory fee1 of just 0.50%
Automatic portfolio rebalancing and daily monitoring
Access to a financial advisor
And no, I am not interested. My current deal with WF is I get 100 free trades per year in my brokerage account. No advice. I buy and hold Vanguard index etfs.
The people that don't know how to manage their money/investments are also too stupid to assess the ability of a financial professional to manage their money/investments.
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