The way things are now, there seem to be a lot of compelling reasons to work with an investment advisor. Increasing complexity, market volatility, and geopolitical uncertainty. All the issues might encourage you to seek professional advice. But before you jump into paying a whole bunch of fees and outsourcing control of your money.
My experience in talking with investment advisors has been an unhappy one. Notwithstanding many years of “experience”, I have found their knowledge to be, at best, superficial. Many of these investment advisors are simply pushing internal products for their institution to increase the assets under management and the profitability of the firm. In my opinion, they are foremost salesmen and secondarily investment advisors. They use “canned” presentations to sell products and have very shallow knowledge of ta, accounting and the fundamental concepts of finance.
I’m not sure where the real work gets done, but it’s not at the investment advisor level. IN many instances, if you do your own “due diligence,” you will likely know more than they do. It’s a great disservice to investors and clients that this is how the industry has developed, but it generates billions for the firms that are involved in investment and advisory fees. And as a result, a lot of “fat cats” are harvesting billions for their firms.
So, What Should You Do?
Investment advisors have a role to play, but you need to take a lot of time and effort to find the right one for you. That means that you will likely need to interview a lot of IAs to get a feel of their level of knowledge and professional expertise. Remember that you are interviewing them for a job. You are hiring them; they are not hiring you. Don’t be bullied by them when they try to convince you that they are experts who can best help you. You are paying them, and you are the boss. Don’t forget it!
This is the one area where I have been totally underwhelmed by the people I have talked with, except in one case. One of the IAs that I have interviewed is new at the “business”. He has been open-minded and encouraged a relationship where he is there to serve me, not the other way around. The others have all had the attitude that they are basically doing me a favor taking me on board.
Most of them have not asked me what I need, what I want, what my goals are and how to achieve them. I have to fit into their “mould”. I am paying them, and they tell me when I discuss my needs that “that’s not what we do here.” What does that mean? I am paying you, you do as you’re told!
Stays away from these “fake” professionals who are only concerned with how much income they generate, not about how much money you make.