{"id":57648,"date":"2023-03-21T14:34:16","date_gmt":"2023-03-21T14:34:16","guid":{"rendered":"https:\/\/adamfayed.com\/?p=57648"},"modified":"2023-11-21T10:07:07","modified_gmt":"2023-11-21T10:07:07","slug":"what-is-the-benefit-of-getting-an-investment-advisor-or-consultant","status":"publish","type":"post","link":"https:\/\/adamfayed.com\/es\/expats\/expat-guide\/what-is-the-benefit-of-getting-an-investment-advisor-or-consultant\/","title":{"rendered":"What is the benefit of getting an investment advisor or consultant?"},"content":{"rendered":"

What is the benefit of getting an investment advisor or consultant?<\/p>\n\n\n\n

We live in a world where people can invest online into many different assets.<\/p>\n\n\n\n

Therefore, what are the main benefits associated with good financial or investment consultants\/advisor?<\/p>\n\n\n\n

Below is a list.<\/p>\n\n\n\n

Access to different kinds of assets<\/strong><\/h2>\n\n\n\n

It might be possible to gain access to ETFs, funds and many different assets on your own.<\/p>\n\n\n\n

However, an investment advisor can give you access to opportunities that aren\u2019t usually available to the average, or even wealthy, investor.<\/p>\n\n\n\n

Some investment opportunities are institutional in nature, such as some forms of alternative assets linked to property and certain corporate bonds.<\/p>\n\n\n\n

The 60%-40% rule is \u201calmost dead\u201d.<\/strong><\/h2>\n\n\n\n

The 60%-40% portfolio was simple. 60% should go into stocks and 40% in bonds. Those assets are easy to get hold of yourself.<\/p>\n\n\n\n

The problem is, government bonds and cash have been paying less than inflation for over a decade.<\/p>\n\n\n\n

Until that changes, the 60%-40% portfolio doesn’t make sense.<\/p>\n\n\n\n

Therefore, seeking alternatives becomes important, especially with bank deposits looking increasingly unsafe.<\/p>\n\n\n\n

Access to a network<\/strong><\/h2>\n\n\n\n

Most advisers or consultants are specialized. For example, we specialise in investments for high-net-worth individuals and expats.<\/p>\n\n\n\n

We naturally have access to specialists in areas such as law (wills, probate etc), insurance, mortgages and many other areas.<\/p>\n\n\n\n

Sometimes we can give existing clients a discount on those kinds of services and trusted recommendations.<\/p>\n\n\n\n

Emotions<\/strong><\/h2>\n\n\n\n

Be honest. How good are you at going to the gym?<\/p>\n\n\n\n

If you are like me, my self-motivation comes and goes. In comparison, when I had a trainer, I always went to the gym, because I had appointments in my diary.<\/p>\n\n\n\n

Yes, rationally speaking, it would be more efficient if the trainer gave me pointers over a few sessions, and then I continued alone. <\/p>\n\n\n\n

Human nature being what it is, I made more progress keeping to a plan and having somebody to hold me to account, who was being paid for doing so.<\/p>\n\n\n\n

Even if we exclude the arguments about alternative assets, firms like the Vanguard Group have found that advised clients get better (on average) returns than do-it-yourself (DIY) ones.<\/p>\n\n\n\n

They even tried to calculate the benefits associated with advisors, as per the table below:<\/p>\n\n\n\n

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Source: seeking alpha<\/figcaption><\/figure>\n\n\n\n

Yes, that does mean that even invested in the same funds and paying higher fees, advised clients \u201cbeat\u201d DIY clients.<\/p>\n\n\n\n

What could explain this? It is simple. Emotions. Nobody cares about your own money as much as yourself, but that is the problem.<\/p>\n\n\n\n

A good advisor will take emotion out of the process and invest you properly.<\/p>\n\n\n\n

We have seen the benefits of this in recent years.<\/p>\n\n\n\n

When stock prices crashed in February 2020, few DIY investors want to put money to work. Come the recovery, \u201ceverybody\u201d seemed to want to invest.<\/p>\n\n\n\n

Likewise, fewer people invested after the Russia-Ukraine war, and even sold out.<\/p>\n\n\n\n

Many investors who “did their own research” also got stung by Cathy Wood’s fund, as detailed on the video I did below:<\/p>\n\n\n\n

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