# 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:** 3
**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, 6:54pm UTC](https://boards.straightdope.com/t/if-i-win-the-lottery-do-i-really-need-a-financial-advisor/997606/41 "2024-02-15T18:54:08Z")
> [@Munch](#): > > 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. So you were circuitously trying to avoid conceding that you were wrong by drawing attention to a completely different earlier post that was correct. Okay. I’m not being persistent about this to be a jerk, it’s important. If a financial advisor tells you that a reason to pay them is because they can get you privileged access to certain markets, they are lying. What you pay an advisor buys you sensible advice, not special access to top secret investments. ---
**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, 7:02pm UTC](https://boards.straightdope.com/t/if-i-win-the-lottery-do-i-really-need-a-financial-advisor/997606/42 "2024-02-15T19:02:36Z")
> [@Riemann](#): > > If a financial advisor tells you that a reason to pay them is because they can get you privileged access to certain markets, they are lying Exactly. If they have this privileged access, why aren’t they using it themselves to get quietly rich, rather than hanging out a shingle as an ‘advisor’? ---
**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, 7:03pm UTC](https://boards.straightdope.com/t/if-i-win-the-lottery-do-i-really-need-a-financial-advisor/997606/43 "2024-02-15T19:03:41Z")
> [@Riemann](#): > > So you were circuitously trying avoid admitting that you were wrong by drawing attention to a completely different earlier post that was correct. Okay. No, I was addressing another poster on the broader subject that happens to be the basis of this thread. I brought up my previous reply because it seems like xtenkfarpl ignored my and several other posters’ extremely valid reasons a financial advisor makes sense for a very large population. You are correct that advisors do not hold special keys to those particular investment vehicles, they just provide far greater ease of access, for whatever that may be worth. > [@Riemann](#): > > What you pay an advisor buys you sensible advice, not special access to top secret investments. Solid advice. ---
**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, 7:06pm UTC](https://boards.straightdope.com/t/if-i-win-the-lottery-do-i-really-need-a-financial-advisor/997606/44 "2024-02-15T19:06:04Z")
> [@Munch](#): > > they just provide far greater ease of access No, they really don’t. It would take me a few seconds to buy any of the assets classes you mentioned right now in or through one of my brokerage accounts. ---
**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, 7:09pm UTC](https://boards.straightdope.com/t/if-i-win-the-lottery-do-i-really-need-a-financial-advisor/997606/45 "2024-02-15T19:09:36Z")
Great. If you could provide easy instructions for someone with nothing but a checking account to set up an account to buy into the Sabrient Baker’s Dozen UIT, I’d be legitimately impressed. Either way, I consider this hijack well-flogged. ---
**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, 7:10pm UTC](https://boards.straightdope.com/t/if-i-win-the-lottery-do-i-really-need-a-financial-advisor/997606/46 "2024-02-15T19:10:06Z")
> [@Munch](#): > > If you could provide easy instructions for someone with nothing but a checking account to set up an account to buy into the Sabrient Baker’s Dozen UIT, I’d be legitimately impressed. That is _advice_, not _access_. And that’s a very important distinction, one that you just emphatically agreed with a couple of posts above. ---
**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, 7:12pm UTC](https://boards.straightdope.com/t/if-i-win-the-lottery-do-i-really-need-a-financial-advisor/997606/47 "2024-02-15T19:12:03Z")
I consider it access, because currently I’m legitimately unaware of how you would purchase into it. I have a Fidelity account and the ticker for it won’t populate. When I was an advisor, it was available to me through my Pershing platform. If there’s a way for an average person on the street to do so, you’re absolutely correct that it’s advice. ---
**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, 7:21pm UTC](https://boards.straightdope.com/t/if-i-win-the-lottery-do-i-really-need-a-financial-advisor/997606/48 "2024-02-15T19:21:29Z")
It looks like it’s FYTHLX? It looks like Fidelity don’t have it, I don’t know why. It comes up in my Schwab account. ---
**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, 7:22pm UTC](https://boards.straightdope.com/t/if-i-win-the-lottery-do-i-really-need-a-financial-advisor/997606/49 "2024-02-15T19:22:11Z")
There you go. Schwab tends to be a tad more robust. Ignorance fought - thank you. ---
**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, 7:34pm UTC](https://boards.straightdope.com/t/if-i-win-the-lottery-do-i-really-need-a-financial-advisor/997606/50 "2024-02-15T19:34:43Z")
> [@Munch](#): > > Great. If you could provide easy instructions for someone with nothing but a checking account to set up an account to buy into the Sabrient Baker’s Dozen UIT, I’d be legitimately impressed And this will make you rich? Quickly with never a hitch (to quote a D H Lawrence poem). Many studies have shown that over a long time managed funds significantly underperform the indexes. A large part of that is expenses, but even discounting that, it seems that on average, market timers and ‘trend predictors’ often get it wrong. There is no magic bullet. Or if there is, they’re not telling us… 😉 ---
**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, 7:39pm UTC](https://boards.straightdope.com/t/if-i-win-the-lottery-do-i-really-need-a-financial-advisor/997606/51 "2024-02-15T19:39:02Z")
> [@xtenkfarpl](#): > > And this will make you rich? No, and I haven’t claimed it did. And I haven’t claimed that alternative investment options mean _better_ investment options. Please read the thread from the beginning. > [@xtenkfarpl](#): > > it seems that on average, market timers and ‘trend predictors’ often get it wrong Yes, they surely do. However, one prediction I will stand on - people will continue to act irrationally, especially when it comes to their money. Seeking out sound financial advice that will be followed is essential. For many, that means having an advisor to help them along the way. ---
**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, 7:44pm UTC](https://boards.straightdope.com/t/if-i-win-the-lottery-do-i-really-need-a-financial-advisor/997606/52 "2024-02-15T19:44:29Z")
> [@Munch](#): > > Please read the thread from the beginning. I have. And I’m not sure what your agenda is, but you seem to have one. There does not seem to be any point in continuing this thread, I won’t pursue it any further. Have a nice day. ---
**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, 8:07pm UTC](https://boards.straightdope.com/t/if-i-win-the-lottery-do-i-really-need-a-financial-advisor/997606/53 "2024-02-15T20:07:03Z")
> [@xtenkfarpl](#): > > And I’m not sure what your agenda is, but you seem to have one. My agenda is usually to combat drive-by posts about a topic I’m familiar with. I used to be a financial advisor, but discovered I hated sales and asking for referrals so I left that area of the industry. I have a lot of friends who are advisors, and the typical Boglehead bullshit about them is grating, so I likely chase down an argument on the topic further down the road than I likely should. ---
**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, 8:41pm UTC](https://boards.straightdope.com/t/if-i-win-the-lottery-do-i-really-need-a-financial-advisor/997606/54 "2024-02-15T20:41:52Z")
> [@Munch](#): > > I have a lot of friends who are advisors Thanks for clarifying your agenda. > [@Munch](#): > > the typical Boglehead bullshit about them is grating, so I likely chase down an argument on the topic further down the road than I likely should. So what “typical Boglehead bullshit” is grating? The one valid point you’ve made has been that a financial advisor is a firewall against panicking when the market drops - which is absolutely consistent with what any Boglehead would advocate. It seems to me that a competent financial advisor should be guiding a less knowledgable investor in implementing all of the Boglehead principles. - Invest early and often - Diversify with index funds - Never try to time the market, stay invested - Keep costs low - Keep investments simple - Miminize taxes Which of those do you and your advisor friends think are bullshit, exactly? ---
**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, 9:02pm UTC](https://boards.straightdope.com/t/if-i-win-the-lottery-do-i-really-need-a-financial-advisor/997606/55 "2024-02-15T21:02:52Z")
The typical Boglehead bullshit is the implication that all investors are perfectly rational and exhibit perfect restraint. I know some very good advisors. I also know a lot more really shitty ones who treat their clients like garbage. The typical Boglehead likely does far less harm against the industry than the industry does to itself, to be honest. But if people are capable of doing their own research and learning all the ins and outs of investing, then I think it’s at least equally possible they can do some research and find a good advisor. I think people are likely to find value in an advisor if they self-identify as making the occasional rash decision, if they are procrastinators, if they know they don’t like learning about investing, or if they think they have a complicated financial situation. But don’t take my word for it, Bogleheads. Take it from Vanguard themselves, who place [the value of an advisor at about 3% annually](https://www.ch.vanguard/content/dam/intl/europe/documents/en/putting-a-value-on-your-value-quantifying-vanguard-adviser-alpha-eu-en-pro.pdf). (Note: do not ever pay an advisor 3%/year.) ---
**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, 9:20pm UTC](https://boards.straightdope.com/t/if-i-win-the-lottery-do-i-really-need-a-financial-advisor/997606/56 "2024-02-15T21:20:24Z")
> [@Munch](#): > > The typical Boglehead bullshit is the implication that all investors are perfectly rational and exhibit perfect restraint. It’s very odd to call this “Boglehead bullshit” when the Bogle principles are all about recognizing these flaws and how to avoid them. Perfectly _consistent_ with what a good financial advisor should be doing. > [@Munch](#): > > I also know a lot more really shitty ones who treat their clients like garbage. The typical Boglehead likely does far less harm against the industry than the industry does to itself, to be honest. Exactly. So I’m really not sure why you find it annoying that people would recommend healthy skepticism about financial advisors. There are _some_ excellent advisors, but you need to verify, especially to ensure that they do not have a direct conflict of interest by taking kickbacks through commissions on investments that they recommend. And any advisor that thinks the Bogle principles are bullshit is a big red flag. > [@Munch](#): > > But don’t take my word for it, Bogleheads. Take it from Vanguard themselves, who place [the value of an advisor at about 3% annually](https://www.ch.vanguard/content/dam/intl/europe/documents/en/putting-a-value-on-your-value-quantifying-vanguard-adviser-alpha-eu-en-pro.pdf). That article makes the quantitatively meaningless statement that an advisor _can_ be worth 3% under certain circumstances. Up to 3% or more! And you’re misrepresenting it to imply that an advisor is _likely_ to be worth 3% _on average_. Complete bullshit. “An advisor can generate excess returns of x%” is a completely flawed metric by which to recommend the services of a financial advisor. An advisor is not a hedge fund manager. Generating excess returns isn’t a financial advisor’s job, except in the narrow sense of minimizing taxes. ---
**Author:** ![Sage\_Rat](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/sage_rat/32/399_2.png) [@Sage\_Rat](https://boards.straightdope.com/u/Sage_Rat)\ **Post date:** [February 15, 2024, 9:28pm UTC](https://boards.straightdope.com/t/if-i-win-the-lottery-do-i-really-need-a-financial-advisor/997606/57 "2024-02-15T21:28:20Z")
> [@Great\_Antibob](#): > > But “people win lottery, retire, and live quietly within their means” is along the lines of “dog bites man” in terms of the news. I think it would be more along the lines of “dog poops outside”. ---
**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, 9:31pm UTC](https://boards.straightdope.com/t/if-i-win-the-lottery-do-i-really-need-a-financial-advisor/997606/58 "2024-02-15T21:31:28Z")
> [@Riemann](#): > > So I’m really not sure why you find it annoying that people would recommend healthy skepticism about financial advisors. Healthy skepticism is great. I’ll encourage all the healthy skepticism in the world, and add to it. But there is plenty of outright refusal to acknowledge the value of an advisor in this thread. I’ve made recommendations against people on this board getting an advisor, I’ve offered assistance in finding appropriate advisors, and I’ve made cold calls on behalf of posters on this board to find an advisor who would be a good fit. It takes work finding the right person. I think someone unable to make that effort is probably also not the type of person who’s going to follow advice on z Bogleheads to a tee - but rather take a hodgepodge of advice wherever they get it, and land in a mess. Just read threads on this board when people ask for advice. People fall all over themselves to tell them everything they know about investing, and the OP ends up with 26 different pieces of contradicting advice. > [@Riemann](#): > > That article makes the quantitatively meaningless statement that an advisor _can_ be worth 3% under certain circumstances. Up to 3% or more! Yes, assigning value to the relationship side of the equation is guesswork. But it exists - how would you quantify the value of someone who convinces you to stick by your original financial plan and not completely liquidate at the bottom of the market? Is more or less than zero? ---
**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, 9:39pm UTC](https://boards.straightdope.com/t/if-i-win-the-lottery-do-i-really-need-a-financial-advisor/997606/59 "2024-02-15T21:39:15Z")
> [@Munch](#): > > how would you quantify the value of someone who convinces you to stick by your original financial plan and not completely liquidate at the bottom of the market? Is more or less than zero? You certainly cannot equate the value of sensible advice to subsequent market performance. It is not the correct metric. Suppose an client who is the sole means of support for several dependents and who is retiring in a few years had 100% of their money invested in Nvidia at the beginning of last year because they thought the company had a cool name. The correct advice would have been to diversify their investments. But by your metric, that advice was “worth” minus 600%. Suppose a financial advisor _does_ tell someone to sell when the market is down 20%. The market goes down _another_ 20%, and the client buys everything back lower, saving a bunch of money. Is this a good financial advisor? ---
**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, 9:59pm UTC](https://boards.straightdope.com/t/if-i-win-the-lottery-do-i-really-need-a-financial-advisor/997606/60 "2024-02-15T21:59:23Z")
If we’re going to come up with extremely specific corner case hypotheticals, why not apply a set of “financial guidelines that an advisor should be operating under” to a broader set of hypotheticals set at random points throughout the history of the market and run them through a Monte Carlo assessment? I can hazard a guess as to how that’ll turn out. [Previous page](https://boards.straightdope.com/t/if-i-win-the-lottery-do-i-really-need-a-financial-advisor/997606.md?page=2) [Next page](https://boards.straightdope.com/t/if-i-win-the-lottery-do-i-really-need-a-financial-advisor/997606.md?page=4)