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My Certified Financial Planner took a look at my financial goals and came up with some debt and equity funds I could invest in. A few months later I saw a newspaper article where another financial planner recommended some of those same funds.

Thoughts that came to mind:
1. If all financial planners got their information about the best funds from some common source, then what source could that be?
2. Is it really worth paying someone a fee for this because I could just look up websites like Value Research or Money Control and decide.
3. Stock markets are quite unpredictable anyway, so even a financial planner won't be able to predict the future of a fund (My CFP recommended a fund which is giving just 6.5% interest, but my CFP recommends I continue with it because their teams research indicates it is worth sticking to it. Nothing was revealed about their "research" though. How can I trust that?!).

How does a financial planner's choice and advice on fund investment add value when I could have looked it up and decided it myself? What kind of research do they do when they make these decisions?

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A financial advisor is a service professional. It is his/her job to do things for you that you could do for yourself, but you're either too busy to do it yourself (and you want to pay somebody else), or you'd rather not.

Just like some people hire tax preparers, or maids, or people to change their oil, or re-roof their houses.

Me, I choose to self-manage. I get some advise from Fidelity and Vanguard. But we hired somebody this year to re-roof our house and someone else to paint it.

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There are raters of stock and bond funds of which Morningstar's is the best. Standard and Poor's and Value line offer reports that aren't quite as good.

If you are able to read and understand these reports yourself, you don't need a professional. Such help is necessary for people who are "rank beginners" in investments.

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  • Exactly what I'm asking. What exactly are the details of these reports that need to be understood? For fund performance there's just a graph to look at. Does the "research" also include looking into which companies the mutual fund is split into? Or whether a withdrawal attracts tax...or something more? If it isn't too much to ask, what are a list of things to research about funds?
    – Nav
    Sep 5, 2016 at 4:54

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