Quote:
Originally Posted by Love Sosa
Most financial advisors are going to park your money in overpriced mutual funds and collect a commission. You're worth 7 figures, do you really think it's smart to trust someone who makes 60k/year and has no skin in the game? If they were really intelligent investors, they wouldn't be financial advisors.
Maybe it will comfort you to know that many sharp investors are holding large cash positions, and that perhaps investing the bulk of your savings into the tail end of a long bull run may be more risky than you think it is.
Holding cash is not a waste, it represents security and you have lots of capital to deploy if a good opportunity comes your way.
While I agree that you should not be hiring a financial advisor who works on commission, the rest of this post is terrible.
Advisors who work for AUM
do have skin in the game. I'm not sure this is the best way to compensate one, but if that's your requirement, pay a fee-only AUM advisor who is a CFP and does full comprehensive planning.
The idea that they wouldn't be working as advisors if they were intelligent investors is silly also. I believe you should be paying for the process and ongoing coaching, not the returns they provide you. If any advisors is selling their performance, run away.
And finally, cash is not your comfort security blanket. While investing a lump sum can be difficult psychologically when markets have been on a long bull... who is to say it will be any easier to deploy cash into a hemorrhaging bear? A good planner can help evaluate his situation and goals and help him implement and stick to the plan. If he has a history of not investing, or is nervous about doing it himself, or simply just wants another set of eyes, it's definitely worth seeking solid advice from a pro.
http://jasonzweig.com/the-19-questio...ncial-adviser/