No. This post does not provide you asan ideas for 'advisor bashing'. We both have better things to do. The title reflects the way many advisors feel about Facebook group Asan Ideas for Wealth (AIFW).
The group has 8500+ members out which about 100 are regulars and about 200+ are 'active'. That is, they participate from time to time.
There are many direct mutual fund investors in this group. In fact each week there would be 1/2 people who wish to invest directly. Even if they don't know about it, members would urge them to invest directly.
The group has quite a few people from financial services. Many of them do not participate. Those who do, have made their displeasure about "advisor bashing" quite clear.
"Advisor bashing" refers to the constant refrain that one does not need the help of a distributor for investing in mutual funds or a financial planner for money management. Needless to say, I am part of the chorus.Can't resist adding this photo. Credit: Thomas and Dianne Jones (flickr)
I write this on behalf of all AIFW singers to clarify that there is no ill will or hatred towards distributors or financial planners. No one is being targeted or bashed upon.
The urge to reduce investing costs is natural and cannot be curbed. However, there is no free lunch. If one wishes to invest in direct mutual funds, one needs the confidence to develop a simple investment methodology, commitment to follow common sense, do nothing during turbulent times and discipline to invest systematically.
Anybody can do this. What is being presented is a simpler and achievable option. Each individual has to choose what is best for them.
Most people in financial services will not publically acknowledge that DIY is eminently possible (why would they?!). Hence DIYers feel compelled to make this known to new investors.
Btw many advisors rely on CRISIL or VR ratings to a great extent for fund suggestions. Ignoring for the moment peer comparison is not a smart idea, how hard is the same for an investor to do?
This is the age of information. Those who know how to harness it can manage quite well.
There is no free lunch associated with financial advisory either. Conflict of interest, competence of advisors are way more complex stumbling blocks than DIY investing.
The truly DIY investors recognise this and therefore, urge others to follow suit.
This is not bashing. It is avoidance.
DIY investing is simpler than trying to find an advisor. So why bother?
The regulator (whom most advisors pay no heed to) is batting for the investor: Direct plans, registered investment advisors who should not distribute, distributors cannot provide investment advice etc.
The financial services industry does not have the maturity to publically recognise that, just like the competence of investors vary, so will that of the advisors. There are too loyal to their clan to admit that meeting a dud advisor is extremely easy.
If stating these simple truths is referred to as 'advisor bashing', so be it. One mans meat is the other mans poison. That is the way the cookie crumbles.