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  1. #1
    I don't really care much for what Cramer says on CNBC, but he did have a great quote recently regarding the illusion that the money management industry creates regarding money self-management, "...It's the equivalent of going to Home Depot and asking a question and being told "Sorry, that's only for professionals." "

  2. #2

    The great marketing illusion - Financial Advisors

    I have made a concerted effort for the past 25 years to educate myself about my money management so that I don't have to "trust the professionals." But I see posts all over these forums that advise those who are starting out to get a financial advisor. That is a lot of money over a 30-40 year investment career.

  3. #3
    I think it is too easy to just hand it over to someone when there is usually time to self-educate. The only question is one of motivation. Some quick math for those nay sayers: Let's say one has an average IRA balance during the accumulation phase (say 25 years) of 400k. At the peak, let's say it reaches $1 mil. The average would be (using 1% expenses) $4000/year and at the peak it would be $10000/yr -- over $100k and one hasn't reached retirement yet. I find it difficult to believe that if someone just invested in two or three index funds over that 25 years that they would be $100k plus behind their peers who sought a Fin. Advisor.

  4. #4
    Aside: assuming a straight line asset increase from 400k to 1000k, the average fee would be $7,000 per annum or $175,000 over the 35 year period. Rick Edelman and his peers are quite familiar with this math!

  5. #5
    I don't know if these type of "advisors" still exist, but when I first started, my FA would recommend some funds that had upfront charges (from which the FA got a kick-back). .... Then, each month he would change about half to others with upfront fees. After I left in just one year, I figured I had bought that FA a new Cadillac.


 

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