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...the empirical evidence shows that people on the whole tend to do better WITH advisors.

Curious on this. Would you say that the empirical evidence you are referring to is more historical than present and results from the fact that most people did not know any better?

I have also read that people with advisors tend to do better than people without advisors.

Remember, we here on and other investment boards are a "self-selecting sample" of those who know more about investing than the population at large or at least have the interest so we soon will be.

In spite of the loads (sales charges, deferred sales charges, 12b-1 fees, fees for assets under management), I have read that the typical investor will do better with an advisor than without because:

1. The advisor will typically suggest diversification, not just between stocks, but also between asset types (stocks, bonds), typically using mutual funds (with loads). A typical uninformed investor would take on too much or too little risk, whereas an advisor would try to balance risk and reward with a plan the investor is likely able to stick with.

2. The advisor will typically recommend a systematic investment plan. Contrast that to the tendency for the American public to spend what they have instead of saving or investing for the future.

3. People with advisors are less likely to chase performance (investing in whatever is close to finishing its runup) or invest based on emotions (buying more when they are excited, which is typically near top prices, and selling when they are discouraged, which is typically near the bottom).

Remember, we are referring to the "average investor", not someone who has studied and formulated a sound investment strategy, not someone who is a regular reader of,, or the like.

Also, like any heterogeneous population, some advisors are better than others.

An individual who has the appropriate knowledge and self-control and a suitable investment strategy would probably do better alone with the appropriate investments than with an advisor.

But the studies are based on broad samplings that include people with no clue about investing or who allow their feelings to drive their investments, not the self-selecting samples like members of or
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