Why Pay For Advice?

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“A cynic is someone who knows the price of everything and the value of nothing.”
Oscar Wilde

This week while I was surfing the internet I came across a blog post from Behavior Gap that I really enjoyed and wanted to share, “The Value of an Advisor.”

It seems that so many people are concerned about the price they have to pay for advisory services, but they have no idea how to assess the value of those services. Part of the reason is because they have no idea what a financial advisor is really supposed to do for them.

Most people are under the mistaken assumption that a financial advisor’s job is to use some highly complex and mysterious formula for predicting the movements of asset markets so that you will consistently outperform the markets. This assumption is often bolstered by the financial media and the legions of “fake” financial advisors who advertise and market their services by promising that you will achieve better returns than your neighbor if you hire them.

The real value of a financial advisor is in helping you to write an intelligent financial plan, to fund that plan with the investments most likely to achieve your goals, and to coach you to stick with those investments when the fads and fears of the market tempt you to make a mistake. No black boxes and no magic “performance” formulas. Just planning and behavioral coaching, which is likely to be worth multiples of what you will pay for it.

In short, a real advisor is adept at helping you avoid the regrettable mistakes that most people’s emotions cause them to make, as Carl Richards depicts below in a humorous way:

The Value of an Advisor
Source: Behavior Gap

Thanks to Behavior Gap for the chuckle and for the reminder about the real role that an advisor should play.

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About the Author:

Erik is one of the co-founders of Concentus Wealth Advisors and currently serves as the Chief Executive Officer of the firm. With over 25 years of industry experience, Erik guides the firm’s overall strategy. After graduating from Amherst College in 1991, Erik spent a year working with Rittenhouse Capital Management, before joining Gerald in 1992. Erik currently holds his general securities registrations and insurance licenses, as well as CERTIFIED FINANCIAL PLANNER™ and Chartered Financial Consultant designations. In addition to his formal designations, Erik has appeared on CNBC’s Worldwide Exchange, Fox News’ America’s News HQ, Live Well’s Mary on Money, CN8’s Money Matters Today and The Real Estate Connection. In 2012, Erik was one of thirteen advisors named to Main Line Today’s Top Financial Advisors list. Erik lives in Bryn Mawr, PA with his wife and three children. He serves on the boards of the Philadelphia Chapter of the Salvation Army, Acting Without Boundaries (serving young people with disabilities) and The Holy Child School at Rosemont. In addition, he is on the financial advisory board of the Sisters of St. Francis in Media, PA.

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