I have a post over at Registered Rep this morning about the relationship between clients and financial advisors that I think covers an area that no one talks about out loud…
Why do people hire financial advisers? The answer might surprise you. Sometimes they are merely looking for someone to pull the trigger for them when they’re too shell-shocked to invest for themselves. Other times it’s a scapegoat thing – when investments go bad, it’s a small comfort to some that “it was all his idea.”
In a perfect world, financial advisers could go about their duties to clients knowing that they were hired only for their expertise. But this is a very imperfect world (Arrested Development was cancelled and yet Two and a Half Men is in season 39). In this world, the one we actually inhabit, there is a notable swathe of the investing public that feels better putting the decision in someone else’s hands so that they can agonize over something else. And that’s quite alright, part of the job description when you get into the business of Other People’s Money.