DeepSummary
The hosts, Brian Preston and Bo Hansen, discuss whether financial advisors are worth it or not. They explain that personal finance is personal, and the need for an advisor depends on an individual's situation and the complexity of their financial affairs. They outline three signs that may indicate the need for an advisor: when complexity finds you, when the gravity of your decisions exceeds your comfort level, and when you lack the time to focus on your financial affairs.
The hosts delve into the different roles financial advisors can play, such as a mechanic, a doctor, or a personal trainer, depending on the client's needs. They also discuss the different fee structures advisors may have, including hourly, retainer, and assets under management, along with the pros and cons of each.
The episode also covers the potential value an advisor can add, citing studies that suggest advisors can add up to 3-4% annualized returns through various services like behavioral coaching, tax planning, and asset location. They caution against oversimplified calculations that ignore the decreasing fee structures and the potential value added by an advisor.
Key Episodes Takeaways
- The need for a financial advisor depends on the individual's situation and the complexity of their financial affairs.
- Financial advisors can play different roles, such as a mechanic, a doctor, or a personal trainer, depending on the client's needs.
- There are different fee structures for financial advisors, including hourly, retainer, and assets under management, each with its own pros and cons.
- Studies suggest that financial advisors can add significant value through services like behavioral coaching, tax planning, and asset location.
- When evaluating financial advisors, consider factors such as their credentials, fee structure, communication style, and alignment with your financial beliefs and needs.
- Take advantage of free resources and manage your finances yourself if your situation is simple, but consider hiring an advisor when complexity arises or when you lack the time or expertise to manage your financial affairs effectively.
- Oversimplified calculations that ignore the decreasing fee structures and the potential value added by an advisor can be misleading.
- Personal finance is personal, and the decision to hire a financial advisor should be based on an individual's unique circumstances and needs.
Top Episodes Quotes
- “If you can come and get all the free stuff we're giving and your life is simple enough that you don't need a financial advisor, lean into being a great do it yourselfer as long as you possibly can.“ by Brian Preston
- “When the complexity finds you, it might make sense for you to consider hiring a professional to make sure that you get on the best path possible for your unique circumstance.“ by Bo Hansen
- “If you find your situation where you're like, what do these people even do to warrant their fee? You probably have not found the complexity that requires a financial advisor.“ by Brian Preston
- “I wholeheartedly sleep very well at night knowing that we're doing the best we can to make sure people live their most fulfilled life.“ by Brian Preston
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Episode Information
Money Guy Show
Brian Preston and Bo Hanson
6/28/24
Personal finance is personal, and so are financial advisors. We walk you through everything you need to know about financial advisors: their cost, their value, when you should consider hiring one – and when you shouldn’t.
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