For the horizon of any investor building for retirement yes
by airborneirish (2019-03-18 16:40:49)
Edited on 2019-03-18 16:45:34

In reply to: 100% of mutual funds underperform index funds?  posted by rflor


Considering the ridiculous fees charged for active management it's a no brainer to avoid like the plague.

A good financial advisor charges for his advice and doesn't make his money by earning scalps from the product he pushes.

Mutual funds have a limited role to play for most individuals. For example, there are some mutual funds that are sector specific that give you exposure that is hard to get through individual securities and impossible to get through a passive / cost efficient index fund. That said, if you have such a strong view about a category you should be running your own money. I would stay away from advisors who were doing things like buying defense sector mutual funds, etc.

I'm a FORMER Goldman Sachs wealth manager. I'm not registered or in the business any longer. I would listen to jt on this stuff but as he said he's busy.

If it were me I would want to find an advisor that I paid for advice and service. I would want him to be product agnostic and not have his compensation tied to what he's selling me. I would be hesitant to pay a % of assets because the work required doesn't vary much from $5 million to $10 million, but most advisors charge double for the latter because they take a % of AUM.

As jt said, there's a lot to look for here. For me, using exclusively mutual funds is a sign to look elsewhere.