I had a knee replaced in February of this year. Although I've had other surgeries and come out of anesthesia before, this was the first time I woke up with the surgeon standing there looking at me. He had pictures he had taken mid-surgery he wanted to show me. The pictures were both gross and fascinating. It gave me an appreciation for the expertise of the doctor. The combination of brute force, trauma, precision, and technical proficiency to pull off an operation like that is incredible. How many people in the world can do something like that?
There are many problems with healthcare in America. I would be happy to complain for an hour about my frustrations. For one, that surgery was billed to insurance for $125,000. However, when it comes down to it, you need good doctors working on you to give yourself the best chance of favorable health outcomes.
The financial advice industry also has many problems. I know this because you have told me for fifteen years. I started doing this right after the financial crisis, and this industry is still digging its way out of the hole it dug itself during that debacle. The difference is that no matter how bad healthcare gets, people still recognize they need doctors. In investments and financial advice, people have been given the do-it-yourself options.
So, can we please, pretty please, stop pretending that investing on your own is a good idea? I see the same commercials you do. They sell low cost and convenience. The idea that anyone can hop on an app and spend a few minutes looking at charts and deciding what to invest in is absurd. It makes self-directed investors financial advisors in the same way that carrying a water gun would make me a fireman or wearing a stethoscope would make me a doctor.
This is one of the few industries where some of the providers are actively working to convince you that not working with an advisor is in your best interest; it's madness. They do it by using your, perhaps rightful, distrust in financial advisors and the industry to feel like the only things you can actually evaluate are cost and convenience. I want to be clear: there are issues in my industry. I could talk to you for a long time about some of the things that bother me about how this industry works. However, if your life were on the line, you would trust a doctor, not play one. Don't play financial advisor with your future on the line.
I talk about this issue more than any financial advisor I know, and people often wonder why I have so much to say about it. It's because narrative drives actions. Nearly one in three Americans is a self-directed investor. That shows me that we have failed as an industry to educate the public on why they need professional assistance. As financial advisors, our primary function should be education. Education is the bedrock of good decision-making, and what people need more than anything is education and engagement. Your finances give you the best chance of favorable outcomes now and in the future. So please, can we stop pretending the complexity of financial planning and investing can be done on an app and start engaging like your future depends on it?