TikkaShooter said:

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I suppose I wrote it out poorly.

Rewrite:

It's obvious from the responses here that those who use an FA, do so bc it gives them the feel goods.

Meaning, that IMO - investing is scary to some folks. They don't understand it. Never taught about it. And would rather let someone else do it vs "screw it up" if DIY.

There's just so much great free info out there these days. I'd start at Boggleheads wiki and go from there.

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That's not obvious at all. I know a ton about investing and never make decisions based on feelings (I leave that for liberals).

Now, I'm sure there are many advisors that are not worth it and I'd never get one through any of the large firms.

Eh, it's pretty obvious.

The advisor's job isn't to select the best stock picks. They can't do that

Their job is to facilitate a plan that enables you to stick with it through thick and thin to reach your goals.

You will reach your goals sooner without the advisor's fee, but behavioral mistakes are far more costly. Investing isn't that complicated, but tuning out the noise can be very difficult for some.

Also ignore the advice to be 100% US large cap stocks. It's had a very good run, but a far more diversified portfolio leads to higher expected returns with less volatility and start date sensitivity.

S&P 500 has had very long stretches of negative real returns, usually coinciding with extremely high valuations similar to today. You mitigate that risk by also investing internationally and across other risk premiums such as Small Cap Value.

It does give me the "feel goods"

It feels good to talk to somebody smarter than me about finance and get his perspective.

It feels good to know that because my portfolio is designed for my individual needs, I'm not going to have to worry about Vanguard sticking me with a huge tax liability due to other people's decisions.

It feels good when I look at my portfolio and know that my asset manager recognizes that the S&P currently has massive concentration risk and stretched valuations.

It feels good to look at my portfolio and not see any of the overvalued hype stocks du jour that make no sense from a valuation perspective.

It feels good that my advisor never discusses a benchmark with me without addressing risk in the same conversation.

Indexing is a fantastic strategy for ~90% of Americans. For the other 10% who are dealing with larger amounts of money, generational wealth issues, a need for capital preservation more than capital growth, etc., an asset manager/financial advisor can add significant value.

If indexing were the end all, be all for growth and preservation of capital, why would Bill Gates have hired an asset manager to invest his personal fortune? Again, Uncle Warren provides the perfect example: for him, indexing is insufficient for his goals, for his second wife (who is not financially inclined) a $10 million dollar trust composed of Vanguard index funds is sufficient.

Based on the additional information provided by the OP (already having an asset manager/financial advisor), I'd consider starting a separate index fund and not providing additional capital to my advisor/manager if he or she already manages > 50% of your assets. No matter how much I trust my advisor/manager, I'd never let him or her control >50% of my assets due to wipeout risk.

I can understand why those "feel goods" are important to some people. I could argue that nearly every one is flawed, and your reasons have been crafted/marketed to convince you it's the right thing to do, but thats really not the point of this thread.

The "feel goods" are why I pay someone else to do my not-super-complicated taxes. And I'm sure folks would tell me I could do it myself without involving a third party.

Same with car maintenance.

Same with home cleaning.

Etc Etc

Folks choose to pay others to do things that are pretty darn easy, and don't require expertise. But they pay bc they want peace of mind. Investing is one of those things.

Quote:

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Folks choose to pay others to do things that are pretty darn easy, and don't require expertise. But they pay bc they want peace of mind. Investing is one of those things.

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Ehh, You're wrong. Good enough (indexing) and optimal (The Superinvestors of Graham and Doddsville) are not the same.

Oh boy. Oh my.

This is where we agree to disagree so we can continue having a beer around the B&I campfire.

EagleCamden said:

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Thought I'd ask the group....

If you were to start from ground zero knowing what you know now, for the next 15 years, would you invest $1000 per month with your best financial advisor, or would you invest in a balanced mutual fund portfolio in a Roth at a FREE service like Vanguard?

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I have read so many books on financial markets and every single one of them states if you buy a large sector fund and ride it to retirement,

you will do better than spending 1% to hire someone else to pick your sector funds.

Money, Master the Game by Tony Robbins is really great about explaining this in excruciating detail.

hedge said:

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Fidelity has a better interface than vanguard as well. I only have my Roth with them. So I don't have to mess with often

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I have been with Fidelity as a brokerage service but I do my own investing. I like their platform much better than Schwab. (I have a 401K with Schwab).

I like Vanguard sector ETF and Blackrock.

at age 51 I am still buying individual stocks in my fidelity account to maximize returns, while my main corporate 401K is set at a diversified portfolio with some bonds (yuck).

AggiEE said:

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The advisor's job isn't to select the best stock picks. They can't do that

Their job is to facilitate a plan that enables you to stick with it through thick and thin to reach your goals.

You will reach your goals sooner without the advisor's fee, but behavioral mistakes are far more costly. Investing isn't that complicated, but tuning out the noise can be very difficult for some.

Also ignore the advice to be 100% US large cap stocks. It's had a very good run, but a far more diversified portfolio leads to higher expected returns with less volatility and start date sensitivity.

S&P 500 has had very long stretches of negative real returns, usually coinciding with extremely high valuations similar to today. You mitigate that risk by also investing internationally and across other risk premiums such as Small Cap Value.

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the only reason I will hire a fiduciary is to assist with tax planning once I hit the $1 million mark.

before then, it really isn't needed when half the portfolio is in limited corporate 401K accounts.

My read of previous post is that those who recommend a fiduciary are doing so based on size of their assets and stage in retirement planning - not so much on the "feel goods".

I followed this path. When my retirement planning was 401ks and IRAs, I just put it all at Vanguard and reviewed way too infrequently to rebalance. But I was focused on starting, growing and managing a business.

When assets reached a certain point, it made sense for me to move to someone who understands not just my retirement, but after tax accounts, and most importantly, my business holdings and cash flows from those businesses.

It is nice as well to setup a call when the market gets wonky and discuss how whatever is going on applies to me and my holdings and we reaffirm / change strategy - considering all risks and holdings including real estate, cash needs of businesses,

I grew up on 1.5 acres and live on an acre. I know all too well how to mow grass and maintain a lawn. But I pay for lawn treatments and mowers because they do it better and I get to spend my time focused on other things. I still care very much what the lawn looks like, but I pay for the detailed management of it by professionals.

Big proponent of VTI too for your purposes if you're disciplined. Consistently invest that and don't mess with it.

As others have said, a FA's role is not to "make you more money". They are there to build you a plan for your financial/life goals and discuss various tools or strategies to accomplish that that can get you there more efficiently.

They are also there as an accountability partner. To keep you on track to your goals or adjust the strategy as your life changes.

Majority of people behaviorally will stop investing when their plans change or make a poor financial move when the market corrects. Or will delay saving and investing altogether because they're waiting for that "right" time which comes way too late. A good FA's fee is minuscule to the cost of those mistakes.

Disclosure: Former FA/CFP here that is largely in Vanguard ETFs and private investments now. : )

Just want to point out that OP asked what YOU would do... so no need to call people out on their responses. He didn't ask what would you recommend to someone else, just a survey of what each person thought based on their own experiences.

First 15 yrs and starting from scratch I think Vanguard is a good choice. Once your asset base gets bigger and you are getting closer to retirement then I feel like exploring an advisor might make sense for some folks. If your'e anything like me at a young age my goal was just to get the base built and that was about my only goal.