Why You Need To Fire Your Financial Advisor

really wonder im general do financial advisors make more money than their clients, or is it the other way around.

My brother introduced me to a financial advisor in 2021, since that I have lost 11% of my investment that he is "Managing" Now the market sucked the past couple of years, but If I was as educated back then as I am now I would have never signed up with a financial advisor... My FXAIX has gotten me more (Thank you Tae)... My CD's have gotten me some peace of mind during these crazy times as well, until the market gives some signal that it might turn around I will keep some of portfolio dollars in CD's

The one time I spoke with a "Financial Advisor" he just spent an hour trying to get me to buy life insurance

Our financial advisor ignores many of my questions and instead focuses on my husband (even through I’m a high earner and investor too) He excuses this, saying that most couples he works with, the woman doesn’t work. I can’t wait to fire him.

Tae when does it make sense to have an advisor? How do I know when to sell my VTSAX or withdrawal strategies?

I dealt with a few financial advisors. They all proved to be charlatans. I fired them all, one by one over time. Thanks to the internet, I learned how financial markets work and I’ve been doing my own investments for the past 20 years. Some investment platforms are absolutely free of charge, you can trade stocks, bonds and ETF’s for free! Financial advisors will always tell you to buy and hold stocks for the long term but it’s not always the case. They will also want you to invest in mutual funds that pay high commissions to the advisors. This is a rip-off. ETF’s are similar but at a fraction of the cost of mutual funds.

There is so many Financial Advisors that just fraud their customers. Many celebrities have stories about a financial advisor running away with their money. So yeah, you are better off...

We lived this recently. Happy to report we have our 1.5% fin advisor behind us, now and moving forward. Also, for perspective, if less than 10% of managed portfolios out perform the market average (index), and then you add the fees as losses.... you have an even bigger window of "room for improvement" in your returns by doing it yourself. Agree with Tae, you can do this! Thanks Tae!

Thank you for this video. My daughter had an internship at JP Morgan, and told me a successful doctor lost 1 million with JP Morgan and said if I went with my instinct and didn't listen to y'all I would not lost 1 million, but this fool still invest with them. Educated doesn't mean wisdom. You wouldn't believe how many wealthy people use these type of services with JP Morgan. How they find potential customers are looking into wealthy neighborhoods look up names and solicit them that's just one method. This internship was also the most miserable time of her life. She comes back home crying. We warn her about the corporate world. Yes I know young and dumb. They never listen. Yet another lesson learned in life. I told her these corporation job seems glamorous, but you are selling your soul and you will be miserable. Long story short a new career path.

There are so many financial advisors who my friends meet, and then tell me to buy in because it's the next best thing.

I had an advisor tell me to take 100K loan at todays interest value plus 2% to possibly make 1-2% a year in profit. What??????? My friend signed up, but wtf...

Good video. We invest without an advisor (index funds and real estate). Is there a chance we’d get getter returns with an advisor? Maybe. But I suspect that the probability of finding one who can consistently outperform the market is (a) low and (b) not worth the effort.

Great video as always Tae! Maybe you can make a video discussing the differences between a financial advisor and a custodian for a self-directed IRA?

I got fed up with our financial advisor, he never really addressed our concerns nor really answered questions. He did try to sell us useless products and put our funds into multiple funds that we did not want. Doing much better on our own using Vanguard without paying those outrageous fees.

Odd question but were you in Korea 15 years ago?

I couldn't agree with this sentiment more. I know the absurd amounts of money that gets passed along within the financial advising system, and it makes me frustrated and sad. I wish the sales-oriented tasks would actually be transitioned to doing something productive for society.

Great info 👍 👌

I personally don't use a financial advisor and I would assume the majority of your viewers don't either ( based on the fact they watch personal finance videos). However, I truly believe for many individuals a good financial advisor can be a great teacher and guide for a very overwhelming field. I agree with you that most portfolios are overly complicated and yes they are expensive. But many people don't mind paying a fee, such as paying an accountant, doctor, mechanic, lawyer, or dentist. Yes it is easy to tell a 25 year old to invest $500 a month in the S&P 500 index fund but what advice do you give someone transitioning from full time work to retirement with a seven figure portfolio. How are they suppose to determine safe withdrawal rates in a bear market or someone who inherits their parent's 6, 7, or even 8 figure estate in they late 50s with no experience managing money. Just remember you only get ONE chance to transition to a smooth retirement and one or two mistakes can cost you a lifetime of savings. Great video as always Tae!

Advisors are for ignorant Boomers or people who think it's cool to have "a financial advisor." "I have a guy that I let rob me. Isn't that cool!?"

All great info but I disagree with your thoughts on AUM. If an advisor's assets drop 20% due to performance, then their paycheck falls 20% too. Any person or business will try to max asset size to increase the paycheck.

Another day, another video where the spam comments trying to scam people are allowed to run unfiltered.

NONE of them have your best interest at heart. Their bank account is their #1 priority. O.M.G. Tae is spot on here. These people are snakes & none will tell you HOW or WHY of what to do with YOUR money. Proceed with causation…beware…..

Find a good financial advisor

@Tae Kim - Thank you for so much for doing this video! You have laid out all of the reasons I have grown to distrust financial advisors over the last 20 years. Fee-only financial advisors seem to have become extinct in my town and all that that is left are financial product salesmen. I now invest on my own because the last time I spoke with a financial advisor about 10 years ago I wasted an hour trying to get him to show me if I was financially ready for retirement and he spent an hour trying to sell me on his services, financial products and portfolio management for the low, low annual fee of "only" 2% of my $1 million portfolio. These guys are like the financial industry version of used car salesmen.

Financial advisors were more necessary in the past before all the information in the world became accessible on the Internet.

Thanks, Tae. You provide common sense.

How do I fire my adviser? And where do I go afterwards?

A financial advisor shouldn't be an investment advisor alone. A lot of what a financial advisor does is tax planning and that alone can cover the cost of fees. Many of these concerns are also mitigated by ensuring the financial advisor is a fiduciary.

The assets under management model is wild to me. I wonder if any advisors out there are willing to have skin in the game on your losses as well. That'd be an interesting model!

Thank you for another great video

This is beyond amazing. Success has no shortcuts, there’re ways to attain it.

One of my coworkers paid a financial advisor $200 every month. I thought maybe he made them a millionaire but nope!!

This video is so great! Sharing it with my email subscribers on my newsletter this week!

Great informative video

I'm in the process of switching back to a self managed portfolio after getting talked into using an advisor for a few years.

I ran an MER calculator to compare the 0.07 to 2.09% fees. Over 20 years, I pay 33,000 in fees with the low self managed one. $851,000 lost if I stay with the fees... It blew my mind to see the difference. They are parasites.

@TaeKimFinancialTortoise - I am a new listener with a newbie question... I currently use Morgan Stanley (MS) to manage my investments which I rolled over from various 401K's, stock and IRA's with a 75% Stock 25% IRA investments at the moment. My basic question is: "How do I go about moving all of that out of MS and back under my control without getting killed with taxes?"
Any direction that you can provide either via one of your videos or a recommended book on steps to take is appreciated!

Well said!

What do u think about fundrise Tae?

Tae Kim, how would they be able to feed themselves and their family and sending their kids to college. 😂

This is bonkers. I’m a financial advisor and this sounds nothing like how I conduct my business or the other advisors within my program. I believe this video is throwing a broad umbrella on top of all advisors. I don’t doubt that you have some real scumbag advisors out there. Hell there are some within my city that are like that. cough cough Edward Jones. So many stories I’ve heard about other advisors that are like those mentioned in the video. Financial advisement consists of more than the deliverance of good returns via the stock market. It’s being a pillar of support for those that aren’t well versed in navigating finances. It’s building a relationship with the other human sitting across the desk from you. It’s being a resource to someone. It’s not always the typically thought transactional interaction. If you personally feel that you have a shaky grasp on finances, then we’re here for you. If you’ve got it, then great for you! I’m glad you’re thriving. For those that don’t know and don’t have the time to fully learn, we’re there to help them. Like I said at the top of the rant, there are some pretty shitty advisors that are in it for the money. That’s why if you’re wanting one, be sure to well vet them. Find one with a true passion to help other people. Not those just wanting the money. There are some truths in the video, but it doesn’t apply to all.