[quote=babbling looney]

[quote=William]Ad hominem: The last resort of those who know they've lost the debate.[/quote]

Actually, no.  That is Godwin's law.  No one has brought up Hitler.....yet.

If it were possible to obtain a link to the original article, I would be interested to see what everyone is blathering about.

[/quote]

BL, google the name of the study "William" provided and look for the MorningStar article that references it.

[quote=William]Ad hominem: The last resort of those who know they’ve lost the debate.[/quote]

Hey sure buddy…if it makes you feel better just go ahead and keep thinking that, ok?
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The “Article” reads more like an advertisement than any credible piece of literature.  Evidently “William” is one of those brilliant people who believes everything he hears on TV. And wasn’t it Money Magazine in the late 90’s that listed World Com and Enron as Top Stocks to own for the next decade.    

Some great posts here...

I'll throw in my two cents with a true story that I've shared with prospects who ask me what I bring to the table.  To make a long story short, I had a fellow come to me in 1999 ready to retire.  His buddy was also retiring at the same time and was trying to convince my prospect to go it alone with a hot group of no-load funds.  I spent some time with the prospect, showing him all the similar high P/E large cap growth holdings in this family's funds and discussing a more reasoned investment approach for his age and risk profile.  The story has a very predictable end.  Although my balanced model portfolio didn't have the impressive track record that Janus had in the 90's, my client's rollover account averaged about 7% from 2000-2002 using a portfolio of bonds and value stocks, while his buddy eventually cashed his Janus funds in 2002 with about 30% of his original investment intact (as told to me by my client).

I'm sure there are a lot of similar stories out there.  If your advisor isn't beating your performance, maybe you don't need an advisor...

...but it's more likely you just need a better advisor.

No such thing "William"



You see, we are actually licensed in the securities business. You, clearly, are not.



So to level the playing field, once again, Where do you meet these investors on a “regular” basis as you claim?



As others have pointed out, there are many flaws in your study. In fact, in college, I had a course where the title of one of the books was something like, Lying with Statistics.



To come here and start a thread titled Brokers add no value and then referrence an article that says advisers offer significant value tells us that you lack basic understanding of the english language or are a troll.

My study?

The study was done over several years by Daniel Bergstresser, Harvard Business School, John Chalmers, University of Oregon and Peter Tufano,  Harvard Business School; National Bureau of Economic Research (NBER)

Further, according to the Morningstar article....

"The methodology of the study is rigorous and sound. The massive amounts of data involved have been analyzed for years from many different angles. Researchers from major universities around the country have contributed guidance and expertise to the authors. Morningstar and Financial Research Corporation contributed data (although the findings of the study and the conclusions drawn can only be attributed to the authors.) In addition, staff members of the Investment Company Institute and representatives of various mutual fund companies assisted the authors. This is not a biased study. "

I'm sure the authors would appreciate your rebuttal. Really. It looks like they are trying to do a very through job of it.

What's the point?  So the average E-trade account lost something like 80% during 2000-2002.  Mutual fund investors got scorched following magazine reco's.  Investors got slaughtered following various brokerage firm/advisor recommendations.  etc etc etc

As a "good" advisor, I think one of your main duties is to protect the clients from the firms we work for.  Yeah, that sounds facetious, almost ridiculous.  Yet it's true in my experience.  Wall Street will almost always offer products/ideas when it is most convenient (i.e. easiest to sell) for the firm.

Advisors that have properly allocated their clients' holdings, prevented them from getting too emotional (usually at the worst times) and constantly monitered/reviewed/made tactical moves at the appropriate times has served their clients well. 

Having finally read the article. The article is not the study and only briefly references the actual study.  It seems to me that the purpose of the writer was to try to get people to contact him and buy into some sort of program/book/seminar that will help us combat the terrible news that people can lose money in the market even if they have a broker.  Until I see the actual figures from the study I remain sceptical.

And by the way my clients did not lose any siginificant money in the most recent downturn in the market (2000) because of the way we had positioned them by keeping them from chasing the pie in the sky returns of tech funds and tech stocks. In fact many made money in most cases by moving some into bonds when the average yield on a AAA bond was 8% or better and then selling those appreciated bonds approximately a year ago.

The value of having a broker, in addition to trying to make money in down markets, consists of many more things.  One of which is clearly illustrated in the thread about EIAs and how we has brokers can advise our clients on the pitfalls of this and other strategies (scams) that are flogged by the insurance companies and the broker world.

As The Judge says our job is to manage not only our client's money but their emotions. 

By the way when a client passes away, I wonder how much help the beneficiaries get from Etrade in transfering assets and locating stock certificates that need to be renamed? Not to mention the emotional  comfort and hand holding that is part of the grieving process that we as brokers help our clients go through.

[quote=babbling looney]

By the way when a client passes away, I wonder how much help the beneficiaries get from Etrade in transfering assets and locating stock certificates that need to be renamed? Not to mention the emotional  comfort and hand holding that is part of the grieving process that we as brokers help our clients go through.

[/quote]

How difficult can it be for somebody at e-Trade to say, "What is your address, we will send you the forms that are necessary to change the name on the account?"

Well that is nice if all the assets are in the brokerage account. Often that is not the case.

Right now I am working with heirs of one of my clients who had a brokerage account with me in a Trust account. In addition there were several holdings of various stocks at the transfer agent in her individual name and a very few stock certificates that were squirreled away in the safe deposit box in her deceased husband's name and her and his name as joint tenants. They never got around to changing them into the trust when he died just last year and like many clients they don't always tell us everything.  The heirs aren't sure what to do with the I bonds and she even still had a few bearer bonds (you know the old clip the coupon bonds).  They were pleasantly surprised when we discussed the step up in value rules of the investments and the real estate holdings. 

Then there is the question of the real estate holdings and the rental properties.  True those aren't in a brokerage account, but they are asking for my input on the advisability of renting, selling out right or how they should hold those properties in the future.  Since the attorney who drew up the parents trust also is long gone, I made a few referrals to some lawyers in the area who I have dealt with in the past and trust as well as a recommendation on a CPA firm to help them with these issues.

We also discussed the life insurance policy. The issuing agent had retired and the original company had been bought by a larger insurance company and renamed.  I was able to put them directly in contact with the new firm's claims desk to expedite them being able to make a claim.

This should all be a snap for Etrade to handle.  Nothing quite as warm and fuzzy as an unknown person on the other end of an 800 number and some forms in the mail.  Of course since I have had a relationship with the parents for years, I was able to bring some personal stories to the table and discuss the wonderful people that their parents were and how they will be missed by their friends and the community as a whole.  I 'm sure they would certainly get this treatment from Etrade. 

You may not be able to put a monetary value on these services, but you cannot deny that they have value.  Maybe not for everyone and especially for those people who are only about the money.  For my clients and their families.......they do.  This is why I will be retaining those assets and getting new accounts from the heirs.

You should make sure your advisor is adding value. We use a selection of low cost index tracking ETFs and Mutual Funds. For the smaller investors (of say $5k) we have a service called “Seedlings” see my blog: http://www.ivlions.com/a-new-financia…ller-investors/