I was recently at lunch in Stone Oak, while I was enjoying my Cubano sandwich, it was brought to my attention that the federal authorities had just arrested an advisor in the area. I don't spend much time paying attention to what other advisors are doing, but it kills me when I hear things like this. Advisors already have a mostly uphill battle to establish credibility with our mainstream portrayals like Gordon Gekko and the Wolf of Wall Street; people are increasingly predisposed to be skeptical about advisors and unlikely to believe that some advisors more resemble the Bambi of Bandera.
To be clear, I do not know this advisor; I first heard the name in October. An employee came into the office and said she had just watched this advisor on TV. She brought it up with me because she thought, "How can I get on TV to establish credibility?" Being on the radio and TV must demonstrate that you are credible... right?
Enter.. the challenge with this industry. People mostly choose their advisors because of trust. Trust that is the result of perceived credibility. Being on TV/Radio can do that, and so can working for a firm with a national brand, perhaps through a referral from a friend or family. If you are the 66% of the population with an advisor, how did you choose them? A friend likely told you this person was great, and you should trust them. Did you vet them? Did you interview any other advisors? If your 34% of the population is a self-directed advisor, did you sit down with a few advisors and consider if there is value in working with one of them or did someone in your circle say something like, "The average advisor doesn't beat the market anyway so you might as well just buy X and let it ride?"
In any case, the vast majority of people still need to do their due diligence in thoroughly shopping for the advisor they want to trust. As of this writing, I have spent at least 10 hours researching the best versions of every Christmas gift on my list. I bet you also have spent hours figuring out what to get for your loved ones this year. I would parlay that bet into the high probability that you have spent little time evaluating your advisor (even if that's you) to ensure they deserve your trust and align with your financial goals.
The founders of America cautioned over and over that freedom only works when the electorate is an engaged and educated population. How can you vote for the most qualified candidate if you are not paying attention to issues and educating yourself? Financial outcomes and freedom are similar. Freedom to choose your advisor is only a benefit if you are diligent in your financial planning process and carefully shopping the marketplace for advisors that deserve your trust. Maybe you are already locked in with a great advisor, but my last bet is you won't regret calling me and at least sitting down for a conversation.