Making Mistakes
One of the most unheralded advantages of hiring a professional is that you are paying for mistakes they have ALREADY made, and more importantly, hopefully have learned from...which is kinda disconcerting when professions like medicine and law are termed "practices."
Obviously the financial world is also a practice, one in which when you hire a professional, whether you realize it or not, you are also paying for their past mistakes...mistakes that SHOULD be very lucrative for you to profit from in the future.
Much of the "hustle" of modern retail investing has been a colossal marketing effort, well int the billions, to convince the investing public that: 1) Anyone can invest on their own, and 2) As long as you Index with Low Cost you can "beat the market."
Just like "free" may be the most expensive word in the English language, "Low Cost" has its problems too. Big Problems. But the former point deserves just as much, if not more attention. The combination of "anyone" and "low cost" has created a windfall for behemoth financial institutions like BlackRock (iShares), Vanguard (S&P 500 Index), and Fidelity (Mutual Funds)
The unkown unknowns. Those are what new investors should be concerned with, along with the known unknowns of course. But what "big money" does not provide for the average retail investor, and what a seasoned professional in finance DOES, are answers and strategies for both of those scenarios.
There is a reason why 100% of large-scale dynastic wealth is professionally managed, and not typically by the heirs themselves with "low cost" solutions. Although paying a higher fee may not garner a higher return, it should most assuredly include "lessons learned" from said advisor(s).
One of the most important questions an investor should ask a portfolio manager he is thinking of hiring is: "What mistakes have you made investing?" Pay attention to that answer, and especially how that PM has learned from those lessons in running the practice.
