Ability of Financial Advisers Who May Not Even Be Needed

Most investors don’t need financial advisers for three reasons.

First, basic investing principles are easy to master. Secondly, what to buy is simple in the age of index funds. There is no reason to attempt to buy individual securities. I have explained why in much of my past comments and books.

Third, importantly, adviser fees eat too much out of investment earnings. I repeat this constantly. Adviser fees can account for as much as 20% and more of annual investor earnings.

The garden variety of advisers, that is the bulk of them, are not worth the money because their expertise is run-of-the-mill.

On the other hand, investors who have estate and tax questions need legal advisers. That has little to do with portfolio selection. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)