Value of a Financial Advisor

Anyone see value in getting a FA to help manage money that will be coming down the cute in a year or so? Not having time as a IB-Analyst; does it make sense to develop a relationship (for a fee) with an FA for their services?

 

FAs can be helpful for people that know nothing about investing (i.e., people who do not know what diversification means) because an FA can help prevent them from making really stupid decisions. Otherwise, they are a waste of money...Financial Advisors succeed based on their ability to sell, not their ability to manage money well. As a result, the average FA is a saleman and not a money manager.

 
Best Response

How FA work: They put you in a group of investor from: young/no family - riskier investment TO old/ with family - constant stream of cash

They determine which category you fall into, and then they just invest your money the same way they do it for all the people in your category. The bigger the bank the FA comes from, the better the research usually. Also if you really don't have time it can be a good option.

Sure an FA is just a salesman. The good thing is that the salesman is not the one investing your money, but a team of competent individual does that for you. It's like saying that you shouldn't buy shoes from a shoe vendor, because he doesn't know how to make shoes. But yeah, hopefully someone gets the gist of what I said.

 

I did an internship in PWM. As an IB-analyst, I know I have just as much information at my fingertips as an FA. I agree that there is not enough time to devote to personal investing but as an IB analyst, you should be able to make informed decisions on your own. In fact, I trust my own knowledge over any FA I have ever met. Barnetsl said it well. Save your money.

 

Don't go with a FA if you can do the following relatively well: You'll feel a great sense of accomplishment, self worth, and you'll do as well as most money managers would with your $.

Choose blue chip stocks, use the S&P Vanguard 500 Index Admiral as a hedge, and use 10-20% on stocks you research for fun.

A quick list if I had 100K today:

GE IBM Intel Coca Cola Verizon Pfizer MSFT ExxonMobil Conoco Procter-Gamble

Buy a few of the above names, they're all going to be around a LONG time.

Choose a few good funds: Julius Bauer- Int'l Equity MidCap- SmallCap-

Choose a few stocks that interest you A few weeks ago I was thinking apple would go higher, it did. (don't know what it will do in the next week?) A few months ago Ithought Google would get back above 500 from 435. This kind of plays are fun and keep you having a good time with investing. Win some, you lose some, big deal since it's only 10% of your portfolio (15% max)

 

I think GS PWM has like 43% of the F500 CEOs. I know some ex bankers that use a FA (they are still in finance). For 50-100 bp, they are not too costly. The best thing they can do for you is keep your impluse in check. If you really wanted to buy lots of tech in 1999 and you had a FA, hopefully they warned you enough to stop you. Sometimes something that simple can be worth it.

 
sleepyguyb:
I think GS PWM has like 43% of the F500 CEOs. I know some ex bankers that use a FA (they are still in finance). For 50-100 bp, they are not too costly. The best thing they can do for you is keep your impluse in check. If you really wanted to buy lots of tech in 1999 and you had a FA, hopefully they warned you enough to stop you. Sometimes something that simple can be worth it.

most would've told you to buy

 

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