Why I am Not a Fan of Most Financial Advisers

After I graduated university, I realized there were two types of jobs that were always emailing me trying to get me to work for them, primarily because they have a turnover rate that is unbelievable Financial advisers and Insurance salesman. These two jobs might seem like they are completely different, but unfortunately they are both sales jobs. Your job is not to do what is best for the customer but rather what is best for the company, often giving policies that are actively against the customer’s interest.

The reason the turnover between the two jobs is so quick is because people generally don’t want to do harm to other human beings for a living and those who do mostly are desperate for the money. I will pass on insurance salesman for now and look directly at why I flat out don’t like 99.9% of financial advisers. Take in mind if your adviser is paid by the hour and a fiduciary, they usually don’t fall into this category, because they are required by law to make decisions in your best favor. Like any other sales job, Financial advisers are selling you something and what you might believe is good advice is often hurting you in the long run.

I always recommend someone younger who has no idea about the stock market or finance as a whole, read a book, take a class, watch an online video, anything that can help them avoid predatory practices by financial advisers. Everyone always thinks their guy is the exception to the rule, but most of the time they aren’t. If you have money invested that you don’t plan on touching for 20+ years and compare the returns of the S&P500 to the returns you have gotten in the past 5 years and they are much lower, you are most likely getting screwed. With high transaction fees and management fees, over a lifetime you could be losing thousands of dollars extra for no reason.

A financial advisers job is to sell you bad investments that make them commission but often make you lose money in the long run. They will often try to establish themselves within some community (a church, a small town, temple, ect) and get everyone as a client. The job works on volume, the more people you screw over, the more money you make on commission over time. That is what is so heinous about this profession, the people who often excel in it have sociopathic tendencies and little remorse. I see personal finance as a life responsibility and just like you wouldn’t give a random person your hard earned money to hold for you when you need it, you shouldn’t let someone else invest it.

There is definitely a way to go about getting advice, like I said before fiduciaries are okay and just paying for advice and not giving control of your account is good also. Most of investing on a long term basis for retirement is just about indexing. You buy indices of a market or an ETF that covers the market as a whole and you sit back and do nothing. The hardest part about investing, is getting the money to actually put in the account. It is important to do your own due diligence when it comes to your money, especially when it means your future well being.

Thanks to @Elyaque for the badges