Why You Don't NEED a Financial Advisor | Phil Town

You are confusing a Financial advisor with a fund manager.
Yes, people don’t need financial advisors to pick their funds, or fund managers to manage their high-priced funds, but financial planners who provide advice are proven to bring value to their clients.

The worlds should be separated. People need financial advice and not an advisor that claims they know how to pick a fund.

So if I win the lottery do it on my own? Educate myself on what to invest , money management, etc?

Unfortunately, there's a mix of good info here and bad. One of Phil's main points is that financial advisors are focusing on return (beating the S&P 500, etc.). That's not true. Most financial advisors focus on the rate of return you (as an individual) need to achieve your goals. That's what financial planning is all about. The next huge piece of misinformation here is that the investment recommendation from your advisor is only about returns. It's also about risk. Risk is quantifiable and measurable. If the financial planning analysis shows that you can achieve your goals at a 6% rate of return, do you really need to expose yourself to far higher risks than what is needed. Remember, it sucks to flunk the retirement exam and the make up test may involve being a greeter at Walmart. Good financial advice avoids that. That's what you're paying for. Oh, and if he screws up, FINRA and the SEC will listen to your complaint (accountability). If you mess it up, look in the mirror. All this being said, are all financial professionals good honest people? No. Use FINRA brokercheck and the SEC advisor site and look for disciplinary actions.

It depends on the type of financial advisor you are working with. If your advisor gives you advice as per your financial condition then it's great. Financial advice is not only about giving tips for investment but also assess client's future needs and designing his portfolio according to that. Don't choose an advisor for getting better return but choose them to make your financial life better.

I have no idea how to invest or where to even start to look that's the only reason why I'm thinking about going to a financial advisor

Excellent video! I always knew I'd never choose to get Financial Advisor. My gut told me so. However, thank you Phil for putting concrete evidence as to why I should never get a Financial Advisor. Ha! They are drastically worse than the S&P 500! What's the point of that job, anyway!?

No

There's some financial advisors who genuinely do care. The comments are so ignorant and unfortunate. Some people DO need major financial advice.

I don’t have a financial advisor, and I am doing 12% so far this year

I've been trying to explain this to my good friend and neighbor. I came to YouTube tonight to try to find a video to explain it better than I could. I found this perfect video and THANKS!! Dead-on information. Takes guts and integrity to say it, and you have both. May good karma come your way.

I'm in my mid 20s. I opened a Roth IRA and a brokerage account with PNC. I was paying a 1% annual fee for them managing my money … all of my money is in a mixture of different iShares ETFs (I know Phil doesn't like this strategy, but I actually prefer indexing to individual stock picking). About 2 weeks ago I came to the realization that I have no idea why I'm paying them 1% annually. They aren't doing anything for me. I switched all my money over to Fidelity where there's $0 trades on the ETFs I'm buying every month. I just makes no sense to pay someone 1% of your net wealth every year to tell you things you can easily learn from watching YouTube videos.

This is 100% correct. Financial Advisors are  nothing but crooks and liars who will steer you into garbage products that pay them a massive commission but perform very poorly. look into online brokerage services such as e-trade, Ally, Merrill edge, etc.,  who only charge $5 or $6 a trade (they may give you free trades if you meet certain account balance requirements). then invest in a low cost  S&P 500 index fund. I personally like Vanguard. I've been investing for over twenty-five years  and this is by far the best way to go.

He's right. U don't NEED a Financial Advisor, but can most people honestly say that they're good with their finances alone? I get this is probably coming from a place of distrust. Which makes perfect since. U should be cautious. But also be honest with yourself and how u manage your money. It wouldn't hurt to get some advice. It also helps if you could discern between a salesman and a problem solver.

Time to fire my Financial Advisor !!

How does an average person know when an individual company is on sale?

The FUNNY thing is, having been a common wage earner all my life, I do NOT qualify for getting a financial advisor, so this high bar of entry into getting one has actually protected me from making mistakes that people with higher incomes make.

IT ALL DEPENDS. Everyone is selling here. Looks like you have a book to sell. Anyway, I rather have a professional do the research and I must be competent to make my own decision and on top, I do not have to waste my own time on research rather go out and make the money myself in my business. Just an Opinion. Everyone makes the decision based on their own experience.

Phil- quick question for clarification…how are you defining "financial advisor"?

The term is used throughout your video and it almost seems like you’re talking about more than one group of people within the financial services industry.

Thanks in advance— love the video!

I learned this about 5 years ago and have done very well for myself. In conjunction with neutral position options trading, I've managed to outpace the traditional returns I was getting from banks. When I "woke up" was when I saw a $6000 fee on my account and barely made any money that year. I was livid. Indexes, quality/value companies, and options are my bread and butter now. And I love that the market is going down! So much opportunity!

I use 3 brockers but my last financial company takes 1% from the deposit and <1% from profits

Great content.

How about a CPA, accountant?

Where are the stats to back what you are saying and where are they coming from? Sounds like fluff to me. Are you not seeling your own ideas right now? We would also have to assume one would have to take the time and effort to do their own research in investing when an advisor can create a sound plan. This was a frustrating video to watch

New subscriber here. I been watching most of your video and found them really educational. I was wondering if you could make a video about what brokarage to use to start investing. I know a lot of banks offer them such as Bank of America and Merryl Lynch.

If you are able to guide us that would be great, either way thanks for sharing all your knowledge.

Hey Phil – great stuff. But where do you get your statistics and facts? Links to sources would be appreciated.

What about other services provided by financial advisor such as reviewing your current annuities, long term universe healthcare insurance, estate planning and move advise you the invest at a better performance index or MF? They charge 2% for managing one account but it includes all services provided? 2% sounds high and it does mean that they need to beat my current portfolio by 2% to make it worthwhile

what was the ticker on that s&p 500 phil mentions?

In Australia, we've had a royal commission into financial services which revealed the massive extent to which financial advisors ripped people off, pushed clients into products that were against their interest. People are better off getting into ETF's than going through financial advisers.

This is gold.

In Srilanka, we need a financial advisor for the inversting.otherwise we can not invest(it comes from law).but my advisor get 1% of my income

I live in Spain, I was wondering if someone could show me how to work out the sticker price of businesses on the Spanish stock exchange, I understand the American numbers and names, but do not know which numbers to use in Spain. The Spanish market is a bit sluggish at the moment, maybe there is a business on sale

the devil is in the details

S&p 500

Advisors/Planners are con artists. They love to equate themselves to a surgery you wouldn’t conduct on yourself. Lol. Planners and surgeons are light years apart. Everyone I know who uses or used an advisor is poor. I am rich. Do the math people. Financial planning is easy. Keep your money and DIY!!!!

What's the best way to learn about stock valuation?

Finical advisors are scammers

6:03 THANK YOU! AUM=Assets Under Management is the Financial Advisor's goal for the firm. As a finance graduate, I was shocked and saddened to find out the advisor industry was all about sales. Most of the time the position doesn't even require a college degree or a finance degree at that! Sad!

Thanks for making a case against hedge fund managers. Now can you make a case against financial advisors. My family has a financial advisor and he’s not a hedge fund manager. He doesn’t have to have our money with him invested. He doesn’t choose investments for us, we work with him to choose investments and he advises us.

Agreed. Plenty of free information available online to learn business, finance, accounting, etc to manage your own finances and investments.

All financial advisors claim to beat the market because they lie. Index does not include dividends. The advisors claim they beat the index because they include dividends in their measure of beating the index. Protect yourself. Try Bogleheads.org

World's best portfolio? $1 million each in stocks, bonds, currencies, gold bullion, and real estate. WORST portfolio in the world, $1 each in stocks, bonds, currencies, gold bullion, and real estate. How much really matters. Live cheap, earn a lot. Get at least a $1 million dollars by age 66. Two person professional household, would have $2 million household wealth. Save it up.

Hey Phil, really enjoy your videos. I was wondering if you would do or have a video on IUL 's? Pros, cons and your opinion on them?