# If I win the lottery, do I really need a financial advisor? **URL:** \ **Category:** Miscellaneous and Personal Stuff I Must Share\ **Created:** [February 15, 2024, 3:03pm UTC](https://boards.straightdope.com/t/if-i-win-the-lottery-do-i-really-need-a-financial-advisor/997606 "2024-02-15T15:03:41Z")\ **Posts on this page:** 20\ **Page:** 2
**Author:** ![Riemann](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/riemann/32/3133_2.png) [@Riemann](https://boards.straightdope.com/u/Riemann)\ **Post date:** [February 15, 2024, 5:06pm UTC](https://boards.straightdope.com/t/if-i-win-the-lottery-do-i-really-need-a-financial-advisor/997606/21 "2024-02-15T17:06:19Z")
> [@Euphonious\_Polemic](#): > > Eg. A balanced fund purchased through a bank; MER 2.13 %. This is what you pay each year out of the gross increase in fund value. SAME FUND when you have a fee-based financial advisor; MER = 0.68% I’m having flashbacks to 1985. Total stock market ETFs have expense ratios under 0.05%, in any amount, and you don’t need a financial advisor. ---
**Author:** ![LurkMeister](https://avatars.discourse-cdn.com/v4/letter/l/3da27b/32.png) [@LurkMeister](https://boards.straightdope.com/u/LurkMeister)\ **Post date:** [February 15, 2024, 5:06pm UTC](https://boards.straightdope.com/t/if-i-win-the-lottery-do-i-really-need-a-financial-advisor/997606/22 "2024-02-15T17:06:46Z")
I’m already retired, and have had a financial adviser as part of my Ameriprise account for decades. We have phone meetings every 3-4 months to discuss any possible changes in my investments, or if I want to cash in some of my holdings into available cash to cover planned expenses. If one of my infrequent lottery purchase were to hit big I would have to locate an attorney for the reasons stated by other posters, and then arrange a meeting with my financial advisor. In fact, we had joked about this one time during one of my regular calls when the Powerball/Megabucks was in the $100 million - $billion range and I was waiting to see if the ticket I had bought was a winner. ---
**Author:** ![hajario](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/hajario/32/171_2.png) [@hajario](https://boards.straightdope.com/u/hajario)\ **Post date:** [February 15, 2024, 5:11pm UTC](https://boards.straightdope.com/t/if-i-win-the-lottery-do-i-really-need-a-financial-advisor/997606/23 "2024-02-15T17:11:54Z")
> [@Great\_Antibob](#): > > The Dope skews older and towards higher incomes than society as a whole, so our hidden assumptions tend to bias a bit towards that as well. I didn’t assume anything because the OP laid out their specific circumstances and I was answering that question. I would have answered a general question differently (more or less what you said in your post) ---
**Author:** ![Riemann](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/riemann/32/3133_2.png) [@Riemann](https://boards.straightdope.com/u/Riemann)\ **Post date:** [February 15, 2024, 5:27pm UTC](https://boards.straightdope.com/t/if-i-win-the-lottery-do-i-really-need-a-financial-advisor/997606/24 "2024-02-15T17:27:28Z")
> [@TroutMan](#): > > A financial advisor doesn’t just pick the best investments for you to make the most money with a balanced portfolio. They also look at optimizing tax liability, income vs growth, risk mitigation (all the various life insurance options), providing for dependents, etc. This is correct. A good financial advisor looks at the size of your portfolio, _what you need the money for and when_, determines an appropriate level of risk, then constructs a suitable balanced portfolio with minimal fees. In conjuction with advice from your accountant, the portfolio should optimize your tax position across taxable and tax-free accounts. A financial advisor should recommend diversified funds with minimal fees. Once your investment portfolio is set up, it should require minimal changes other than rolling over fixed income investments that mature. A financial advisor CANNOT do any of these things, you should not ask them to do any of these things, and if they claim to be able to do them you should fire them: - Time the stock market any better than you. - Pick stocks any better than you. - Gain privileged access to investments at lower fees. - Gain privileged access to top secret investments. If they could do any of these things, they would not be working as a financial advisor, they would be working for a hedge fund. There are no secrets, there is no privileged club, there is only financial acumen and common sense. ---
**Author:** ![Euphonious\_Polemic](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/euphonious_polemic/32/3002_2.png) [@Euphonious\_Polemic](https://boards.straightdope.com/u/Euphonious_Polemic)\ **Post date:** [February 15, 2024, 5:31pm UTC](https://boards.straightdope.com/t/if-i-win-the-lottery-do-i-really-need-a-financial-advisor/997606/25 "2024-02-15T17:31:30Z")
> [@Riemann](#): > > I’m having flashbacks to 1985. Total stock market ETFs have expense ratios under 0.05%, in any amount, and you don’t need a financial advisor. Yes, you make a good point. Your random lottery winner may not know about ETF’s though, and would benefit from advice. (Like “invest in this solid ETF”) Others (like you) would be just fine without one. ---
**Author:** ![silenus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/silenus/32/166_2.png) [@silenus](https://boards.straightdope.com/u/silenus)\ **Post date:** [February 15, 2024, 5:45pm UTC](https://boards.straightdope.com/t/if-i-win-the-lottery-do-i-really-need-a-financial-advisor/997606/26 "2024-02-15T17:45:17Z")
At my age, hell no. I’d be hard pressed to spend $100million+ before I go and have absolutely no desire to leave anyone anything more substantive that my best wishes. I’d happily piss it all away, with a smile on my face and a song in my heart. Financial advisors are for the young with family. ---
**Author:** ![xtenkfarpl](https://avatars.discourse-cdn.com/v4/letter/x/c2a13f/32.png) [@xtenkfarpl](https://boards.straightdope.com/u/xtenkfarpl)\ **Post date:** [February 15, 2024, 5:53pm UTC](https://boards.straightdope.com/t/if-i-win-the-lottery-do-i-really-need-a-financial-advisor/997606/27 "2024-02-15T17:53:32Z")
> [@Hermitian](#): > > #2 is the only one that seems useful to me. Depends on the amount of money you’re talking about, I think? If it’s ten million or so, why mess with venture capital when you can use things like index ETFs to get at least a market return? If it’s Musk or Bezos level of money… I can think of a few blue-sky scientific and engineering projects I would like to fund. In which case I’d be picking them myself, not using any advisors… ---
**Author:** ![Saint\_Cad](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/saint_cad/32/18907_2.png) [@Saint\_Cad](https://boards.straightdope.com/u/Saint_Cad)\ **Post date:** [February 15, 2024, 5:56pm UTC](https://boards.straightdope.com/t/if-i-win-the-lottery-do-i-really-need-a-financial-advisor/997606/28 "2024-02-15T17:56:25Z")
I am pretty well versed in finances but I would get an advisor to set it up that through dividends and bond interest I get an income of $200,000 per year after taxes with house and cars already paid off. ---
**Author:** ![Munch](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/munch/32/5281_2.png) [@Munch](https://boards.straightdope.com/u/Munch)\ **Post date:** [February 15, 2024, 5:58pm UTC](https://boards.straightdope.com/t/if-i-win-the-lottery-do-i-really-need-a-financial-advisor/997606/29 "2024-02-15T17:58:25Z")
> [@Riemann](#): > > A financial advisor CANNOT do any of these things, > > - Gain privileged access to investments at lower fees. Many financial advisors do have access to things like closed-end funds, unit investment trusts, an easier way to get access to a broad range of annuity products, maybe they specialize in generating income through covered options, etc. None of that gets close to being involved with a hedge fund. ---
**Author:** ![Riemann](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/riemann/32/3133_2.png) [@Riemann](https://boards.straightdope.com/u/Riemann)\ **Post date:** [February 15, 2024, 6:09pm UTC](https://boards.straightdope.com/t/if-i-win-the-lottery-do-i-really-need-a-financial-advisor/997606/30 "2024-02-15T18:09:23Z")
> [@Munch](#): > > Many financial advisors do have access to things like closed-end funds, unit investment trusts, an easier way to get access to a broad range of annuity products, maybe they specialize in generating income through covered options, etc. They do not have _privileged_ access to any of these things. They can certainly offer you _advice_ about tax-advantaged investments like annuity products that you may not know about. If they are telling you to get into anything that sounds clever like buying closed end funds at a discount or “generating income through covered options”, fire them. _Any_ derivative product fire them and fire them again just to be sure. A non-expert investor cannot increase the returns on their portfolio over the long run doing these things, and if a financial advisor could beat the market like this they would not be working as a retail financial advisor. Be very sure that you understand the fee arrangement with your financial advisor, and they do not have the direct conflict of interest of receiving commissions from investments that they recommend. ---
**Author:** ![Bullitt](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bullitt/32/5725_2.png) [@Bullitt](https://boards.straightdope.com/u/Bullitt)\ **Post date:** [February 15, 2024, 6:20pm UTC](https://boards.straightdope.com/t/if-i-win-the-lottery-do-i-really-need-a-financial-advisor/997606/31 "2024-02-15T18:20:53Z")
> [@Hermitian](#): > > I track my finances and other aspects of my life through spreadsheets. I am retired, and I do the same thing. Once in a while when particular questions arise I’ll hire a financial planner for that focused discussion. > [@Hermitian](#): > > \*I buy about 6 lottery tickets a year so I can have fun fantasizing. We don’t need the “Lotteries are for people who can’t do math” discussion. I already get my return on investment in entertainment. Years ago a U Cal Berkeley math professor won the lottery and he was asked about it. He of all people should know how futilely low the odds are of winning. He answered the same as you: it’s for the entertainment value. ---
**Author:** ![xtenkfarpl](https://avatars.discourse-cdn.com/v4/letter/x/c2a13f/32.png) [@xtenkfarpl](https://boards.straightdope.com/u/xtenkfarpl)\ **Post date:** [February 15, 2024, 6:22pm UTC](https://boards.straightdope.com/t/if-i-win-the-lottery-do-i-really-need-a-financial-advisor/997606/32 "2024-02-15T18:22:57Z")
> [@Munch](#): > > Many financial advisors do have access to things like closed-end funds, unit investment trusts, an easier way to get access to a broad range of annuity products, maybe they specialize in generating income through covered options, etc That may have been true in the past. But since most brokerages (Etrade etc) have eliminated transaction charges, I can’t see much point in using an advisor nowadays? Of course, this does assume that one is willing to spend some time learning about finance and investment. Many people still seem to be afraid of this, or don’t want to do it? My father-in-law, for example, was a very bright engineer, but grew up in the days when only rich people had stockbrokers. ---
**Author:** ![xtenkfarpl](https://avatars.discourse-cdn.com/v4/letter/x/c2a13f/32.png) [@xtenkfarpl](https://boards.straightdope.com/u/xtenkfarpl)\ **Post date:** [February 15, 2024, 6:24pm UTC](https://boards.straightdope.com/t/if-i-win-the-lottery-do-i-really-need-a-financial-advisor/997606/33 "2024-02-15T18:24:47Z")
> [@Riemann](#): > > if a financial advisor could beat the market like this they would not be working as a retail financial advisor. That’s the whole answer, right there. ---
**Author:** ![Munch](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/munch/32/5281_2.png) [@Munch](https://boards.straightdope.com/u/Munch)\ **Post date:** [February 15, 2024, 6:33pm UTC](https://boards.straightdope.com/t/if-i-win-the-lottery-do-i-really-need-a-financial-advisor/997606/34 "2024-02-15T18:33:09Z")
> [@xtenkfarpl](#): > > I can’t see much point in using an advisor nowadays? My reply to Riemann wasn’t an argument for using an advisor, only that they were incorrect in saying an advisor didn’t have special access to certain investments. It’s a very minor quibble, as many of those alternative investments aren’t wise choices. My response to why you might need an advisor still stands. ---
**Author:** ![Riemann](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/riemann/32/3133_2.png) [@Riemann](https://boards.straightdope.com/u/Riemann)\ **Post date:** [February 15, 2024, 6:39pm UTC](https://boards.straightdope.com/t/if-i-win-the-lottery-do-i-really-need-a-financial-advisor/997606/35 "2024-02-15T18:39:33Z")
> [@Munch](#): > > My reply to Riemann wasn’t an argument for using an advisor, only that they were incorrect in saying an advisor didn’t have special access to certain investments… > > My response to why you might need an advisor still stands. Your examples were closed end funds, unit trusts, annuities, funds that use covered call strategies. These examples are all incorrect - I can buy all of these things without a financial advisor. ---
**Author:** ![Bullitt](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bullitt/32/5725_2.png) [@Bullitt](https://boards.straightdope.com/u/Bullitt)\ **Post date:** [February 15, 2024, 6:39pm UTC](https://boards.straightdope.com/t/if-i-win-the-lottery-do-i-really-need-a-financial-advisor/997606/36 "2024-02-15T18:39:45Z")
I searched and found the guy I mentioned some 3-4 posts back. His name is Bob Uomini and he won $22M back in 1995. He was a mathematician from Cal, a differential geometer, not a Cal math professor. “Robert Uomini, who holds a doctorate in math, said that playing the California lottery can be “sheer stupidity.”” And… “As a PhD mathematician Uomini knows full well the astronomical odds against winning the California lottery, but he considers the ten tickets he still purchases when the jackpot tops $10 million as an excuse for fantasizing.” Uomini set aside some of his winnings to fund a visiting lectureship to honor his differential geometry math professor who inspired him to study mathematics. It was pretty easy to find him, by searching on: [U Cal Berkeley math professor won the lottery](https://bit.ly/49FwFSR). Does this link get you past the paywall? ➜ [https://sfgate.com/news/article/Skeptic-Wins-22-Million-In-Lottery-He-Calls-3048712.php?utm\_campaign=CMS%20Sharing%20Tools%20(Premium)&utm\_source=share-by-email&utm\_medium=email](https://sfgate.com/news/article/Skeptic-Wins-22-Million-In-Lottery-He-Calls-3048712.php?utm_campaign=CMS%20Sharing%20Tools%20(Premium)&utm_source=share-by-email&utm_medium=email) Also ➜ [04.09.96 - UC Berkeley mathematics alumnus uses 1995 California lottery winnings to endow annual campus professorship](https://newsarchive.berkeley.edu/news/media/releases/96legacy/releases.96/14351.html) ---
**Author:** ![Munch](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/munch/32/5281_2.png) [@Munch](https://boards.straightdope.com/u/Munch)\ **Post date:** [February 15, 2024, 6:43pm UTC](https://boards.straightdope.com/t/if-i-win-the-lottery-do-i-really-need-a-financial-advisor/997606/37 "2024-02-15T18:43:01Z")
> [@Riemann](#): > > So in what sense does your response still stand? That the value of an advisor comes in large part from acting as a firewall to people who act irrationally in a volatile market environment, and against their better judgment when they enacted a financial plan to begin with. Is that something you disagree with? ---
**Author:** ![Riemann](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/riemann/32/3133_2.png) [@Riemann](https://boards.straightdope.com/u/Riemann)\ **Post date:** [February 15, 2024, 6:45pm UTC](https://boards.straightdope.com/t/if-i-win-the-lottery-do-i-really-need-a-financial-advisor/997606/38 "2024-02-15T18:45:03Z")
> [@Munch](#): > > That the value of an advisor comes in large part from acting as a firewall to people who act irrationally in a volatile market environment, and against their better judgment when they enacted a financial plan to begin with. Is that something you disagree with? No, but this has nothing to do with the post that I disputed, which was your claim that financial advisors have privileged access to certain asset classes. If you were conceding that point and referring to an earlier post, you really didn’t make that clear. ---
**Author:** ![xtenkfarpl](https://avatars.discourse-cdn.com/v4/letter/x/c2a13f/32.png) [@xtenkfarpl](https://boards.straightdope.com/u/xtenkfarpl)\ **Post date:** [February 15, 2024, 6:48pm UTC](https://boards.straightdope.com/t/if-i-win-the-lottery-do-i-really-need-a-financial-advisor/997606/39 "2024-02-15T18:48:00Z")
A fool and his money are soon parted…? ---
**Author:** ![Munch](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/munch/32/5281_2.png) [@Munch](https://boards.straightdope.com/u/Munch)\ **Post date:** [February 15, 2024, 6:48pm UTC](https://boards.straightdope.com/t/if-i-win-the-lottery-do-i-really-need-a-financial-advisor/997606/40 "2024-02-15T18:48:12Z")
> [@Riemann](#): > > No, but this _non sequitur_ has nothing whatsoever to do with what you posted and what I disputed Correct. My comment that “My response to why you might need an advisor still stands.” was to xtenkfarpl, not to you, and was referring to my reasons why a financial advisor is of value from post 7 in this thread. [Previous page](https://boards.straightdope.com/t/if-i-win-the-lottery-do-i-really-need-a-financial-advisor/997606.md?page=1) [Next page](https://boards.straightdope.com/t/if-i-win-the-lottery-do-i-really-need-a-financial-advisor/997606.md?page=3)