As an investor since 2015 and future financial advisor I think it is fair to say that it depends. Perhaps the statement is slightly incendiary to the financial sector, but let me elaborate on my arguments.
A financial advisor offers a personalized, detailed service tailored to the needs of the client and adapted to the client’s personal and work evolution. In my opinion, this is the fundamental advantage.
The advisor creates and manages the client’s financial portfolio, adopting them to personal, social and economic situations in the environment. For example, the financial needs at the beginning of a professional career are very different from those of a pensioner, as a single or single woman, or as the father or mother of a large family.
Clients may have little interest in finance, or limited time to properly manage their portfolio, or fear of investing for different reasons.
The above arguments help justify a professional advisory service, however, with a little interest in bonds and a little research, you can achieve very favorable, if not superior, results.
Two recipes that could jeopardize the added value of a financial advisor:
- A simple solution. Invest in a few passive and index mutual funds and make regular contributions regardless of the state of the markets. For example, S&P 500 (40%), Euro Stock 600 (20%) and sovereign bonds (40%)
- A more advanced solution. Create a broker account (for example, in Interactive Brokers) and create a portfolio of ETFs and again make contributions regardless of the state of the market. ETFs can be the same combination mentioned above. This second option adds liquidity and flexibility to the portfolio.
I venture to say that these two solutions would provide positive guaranteed returns over a 10-year horizon.