No. 104 of 106 Things We Do For Clients
Protect you from emotion-driven behavior that can reduce your market returns.
Studies have shown that those who use fiduciary financial professionals fare much, much better than those who either do it themselves or who use commission-driven brokerage services, which tend to play up to fear and greed in the roller-coaster emotional cycles in which investors often find themselves. In one study a financial advisor added 4% annually to the average return of an investor. This seems to align with a Dalbar study that finds that average investors, as well as advisors who time the markets, earn 3-5% less than the average index fund. Dalbar says that 97% of investors who do it themselves or use advisors who time the markets do worse than the market over 20 years. You don’t need to be one of the 97%.