I have a wildly unrealistic goal, and that is for every adult in the United States to hire a financial advisor. For such a change to happen in the next five years or so, is at least highly unlikely, and some would argue that it will not happen, and perhaps should not happen in my lifetime. Despite naysayers and critics, it nonetheless is my goal and I have embarked on several fronts to chip away day by day to work toward this goal.
There is one very simple reason I have this goal, and that is people need financial and wealth guidance from a professional, dispassionate third party. History, and in fact current day events illustrate quite clearly that people need professional help. Why do investors sell in a panic after the market has dropped precipitously? I saw it first hand in 1987, then again in the 1990’s, then again in 2008. I remember quite vividly employees of mine asking what to do in 2008, and did I think it would go lower or ever go back up? I am not an advisor, but I know many hundreds of advisors and the vast majority had the same advice and recommended to not sell in a panic. History has proved these advisors right time and time again. Yet those investors who either had no advisor or ignored their advisor took a hit and in some cases have not recovered because they made a second unwise, unadvised decision of what to invest in next.
Investing in securities is just one aspect of the type of financial guidance that consumers need and need desperately. People spend too much and don’t save enough, neglect life insurance, do not consider health issues to be connected to wealth and vice-versa. The complexities of one’s financial life are so significant, I find it unfathomable that anyone can believe they go through life completely unaided by a professional. A self-directed advocate and critic of advisors may say anyone can learn these things on their own, and they are partly right. Anyone can theoretically learn quite a bit, and I believe all consumers should get educated an all things concerning wealth. However, going on WebMD and learning about various forms of tick bites is not the same thing as self-diagnosing oneself to have or not have Lyme disease. The ramifications of getting it wrong can be fatal. The same is true of financial advice. One omission, or one decision with your money can radically change your life, for better or worse. It is not a hobby like gardening or wood working where the outcome has a benign effect.
A required subset of my goal is to educate consumers and investors to perceive financial advisors in a different light and eventually consider them on a par with medical doctors and attorneys. While it is true that medicine in all cases and law in many cases is more complicated than financial advice, the outcome of good financial advice can actually have more impact to the consumer than either aforementioned professional, absent obviously life and death medical issues. The perception gap is likely the biggest hurdle to overcome for a variety of reasons and as they say, perception is reality.
Yes, my goal is audacious and unrealistic. History is filled with people with crazy ideas that go nowhere and benefit no one along the way. Just look at the patents filed over a hundred years with the United States Patent and Trademark office and the unrealistic inventor count far exceeds those that created something useful. However, when it comes to professional financial advice, for each consumer whose life is positively impacted by hiring an advisor, it is a worthwhile goal to pursue. And what would society look like if indeed every adult had professional advice and actually followed it?