FinancialEdge: How To Be Smarter Than Your Financial Advisor

Any way you slice it, there is big money in running money - there are trillions of dollars out there in pension funds, mutual funds and individual investor accounts. The financial services industry is a multi-billion dollar enterprise predicated on helping people do what they cannot (or do not wish to) do for themselves.

The question is how much of this is really necessary. Are you better off paying a professional to run or advise you how to run your money, or can you go it alone? Said more bluntly, are you smarter than your financial advisor. If not, can you learn to be?

The Case for Professional Management 

To start with, it is important to note that there are a lot of diligent professionals out there; people who not only work hard to deliver the best results and service possible, but also work to improve their education and knowledge bases. It is also important to realize that good tools can be just as important as innate (or acquired) genius. Many financial services firms give their brokers and advisors access to powerful databases and financial planning tools that can help predict future needs and recommend optimal savings and investment strategies for given risk tolerances. (Learn how to weed out those who are just out to make a quick buck. For more, see Find The Right Financial Advisor.)

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