Financial Advisor improve your bottom line?

I’ve always believed an advisor’s biggest duty is to “save investors from themselves.”  DALBAR conducts a study each year to re-confirm this fact. For the last 20-year period, equity fund investors averaged 3.17% compared to 8.20% for the S&P 500.  That’s a 5% per-year short-fall in the average investors’ returns.

Why does this happen? According to DALBAR most investors do not achieve good returns due to their irrational behavior [such as chasing performance, buying high, selling low, not have a written financial roadmap].

Furthermore, according to a study by ING Retirement Research, investors who work with a financial professional report:

•               Saving significantly more for retirement (2-3x more);

•               over 60% believe they know more about investments than their peers;

•               62% said they were Highly confident about enjoying their retirement.

"We have long believed that financial advice from a trusted professional can be a valuable resource for an investor," said Ashley Agard, head of the ING Retirement Research Institute.  "This latest data collected from thousands of consumers who used our peer comparison tool shows that those who spend time with an advisor are saving more, and doing so with greater investment knowledge and confidence."

One thing not mentioned in either report – the importance of working with a Fiduciary Advisor. Your lawyers, doctor, accountant all have a Fiduciary Duty to put your interests ahead of their own. Most brokers DO NOT. If you decide to seek professional advice, look for a CFA, an RIA who has Fiduciary Duty to put your interests ahead of their own. I always like to say – you can be first (Fiduciary relationship), or you can be last (brokerage relationship)