Madison MoneySports - Personal Finance Thread

[WRXtranceformed]

Financial Advisers are basically just salesmen for a bank's investment products.   They are also incredibly expensive which destroys your returns and have been historically proven to make no more money than index funds.  

Roboadvisers give you diversification, rebalancing and in most cases tax harvesting.   Most roboadvisers also have hybrids with real FAs if a voice on a phone gives you a warm and fuzzy.
Vanguard will give you free advice if your account is over a certain amount (50k IIRC)

I think this used to be more the case back before the legislation was passed a few years ago that changed a lot about the finance industry, including financial advising.  The fees in my particular situation are pretty nominal based on the growth I've seen.  But it's just like anything else, you have to do your research and "buy the seller".  For instance, I wouldn't just use my brother to manage our investments if he and his team were not good, or if I felt like the fees killed the upside.  

One of the other benefits to using an FA is that they give you access to diverse investments that you wouldn't normally be able to buy on your own (ie. you're going to have to buy through a broker no matter what).  The biggest upside here is in tax havens; about half of my tax free income when I retire will come from funds that I couldn't buy just by clicking a button.  Having expertise to walk you through how to structure your retirement income so Uncle Sam doesn't keep raping you is worth its weight in index funds.

I bet if you got in a room full of wealthy people, the majority of them would tell you that they use some kind of money management services.  It's almost a given when you build serious wealth.  Unless you are an expert in finance, wealth management and actually possess licenses to obtain the best kinds of investments, the odds are that you're not going to perform as well as you could.  There have have probably been studies on that, I'm just too lazy to look them up.

Either way, you will certainly save money investing your money on your own.  It's just like working on your car, if you do it yourself you'll save the labor costs.  But if you don't know what you're doing, you might blow up your motor.