Ramit Sethi argues that people should learn the basics of personal finance before delegating to financial advisors. He warns that advisors often charge high percentage-based fees and that treating financial advice like a routine household service is irresponsible. The basics are relatively simple but have tricky pitfalls that the financial industry exploits.
I don't mind people hiring a financial advisor. I do mind paying a percentage of your portfolio, because you are paying way more than you ever thought possible. Hiring a financial advisor is not like hiring somebody to mow your lawn or come clean your apartment every month. But you will often see people with money delegating treating a financial advisor like somebody who mows your lawn. Oh, I don't want to mow my lawn. I'll just pay the experts. No big deal. To me, this represents a central irresponsibility in life. You cannot simply delegate one of the most important things in life without understanding the basics. And the basics of personal finance are not that complicated. But they are tricky, and they are full of pitfalls. And guess who takes advantage of most people's ignorance? The financial industry.
