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The Good, the Bad, and the Ugly of Getting a Financial Advisor
How to distinguish understanding, literacy, and terrible marketing
Most of my life has been a trajectory in discovering sound investment ideas.
Often these will begin from a rather simple, and sometimes silly, place. It’ll be in thought-experiments that sound outrageous or in the love of a distressed company producing an amazing product.
Financial advisors — and financial advising — are seemingly everywhere today.
But it’s sourced from a more foreign place. Not in analysis or in sound reasoning. Sometimes with vast neglect for doing exactly what the job title suggests.
Every sales angle has its fair share of snake oil. Every commission-based salary has its caveat for what it is truly offering.
The bad
Financial advisors are not going to admit that most of the information for their job is actually non-exclusive. For the vast majority of the American working class, an S&P tracker at Vanguard, Charles Schwab, or Fidelity will charge you peanuts to manage your cash passively. As of April 28, 2020, Vanguard’s expense ratio is .04%. It’s going to be near impossible to beat it.
