Quote:
Originally Posted by Slava
I entirely disagree that you can’t just bubble ETF for bonds and stocks and rebalance. I don’t know if people want to get into the active/passive debate that comes from this. I do agree that advisors add a lot more value than just rate of return though. That’s basically undeniable both in terms of of the examples you give, but also in terms of things like structure and strategy that most people are just not aware of.
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I mean, rebalancing 2 etfs mechanically beats the vast majority of active investors - that just isn't debatable. It also isn't what I do with my own money and I wasn't necessarily suggesting that for anyone.
But I think the flaw of "AI can beat an advisors returns so advisors will all get replaced" is the fact that simple algorithmic investing already beats the returns the vast majority are getting and that hasn't made advisors obsolete. If a simple system that works and is easy to understand didn't end advisors I don't see how a complicated black box system will do so.
The value of advisors is clearly in all the "other" stuff. Psychological/tax/planning etc.
Eg. I have an uncle who doesn't have an advisor. He has almost no savings but multiple DB pensions so he's doing great by most standards but no advisor wanted him in the town where he lives (small portfolio == low fees). Anyway, he took his OAS at 65 and then asked me why he wasn't getting anything. I looked into it for him, and because his combined pension/consulting income was over the max, his OAS was getting 100% clawed back. He is planning to quit consulting in a couple of years and fully retire, so he 100% should have deferred to get the higher payouts later, since he's getting $0 now anyway. It was too late to undo the decision when he asked me. If he had someone helping him it would have made a big difference.