In a prior post, I discussed some things to look for in choosing an advisor. In this post I would like to discuss why you should use a Registered Investment Advisor (RIA). Many people question why they should they pay someone to manage their money. Can’t anyone manage their own portfolio? Haven’t I seen the commercials with the person trading from home and obviously making great money doing it?
When even Jack Brennan, chairman emeritus of low cost do it yourself king Vanguard Funds, has come out saying most people need an advisor, you know something has changed. When picking an advisor, there are many good sources for the standard questions to ask, including the SEC website. But after spending over twenty years in the investment industry, and learning a lot about the business, I thought I would discuss what I see as the key issue when picking an advisor: Should you go with a broker or a Registered Investment Advisor (RIA)?
With the world (or at least the digital version) at one's fingertips wherever you go, it is easy to be caught up in the desire for instant gratification. Do you want to listen to music, check the latest sports scores from around the world, find out what your friends are doing, play a game or trade a stock? Just launch an app on your smartphone or tablet. It is all there. We are now connected wherever we go, whenever. One of the side effects is a shortening of time frames, especially in investments. We have gone from investing for years, to days, to minutes to fractions of a second. Multiple cable TV networks, newspapers, websites and blogs compete for attention. Especially for the larger players, dependant on viewers and advertising, every new piece of data is emphasized and hyped to get attention, viewers and revenue.