Why Clients are Attracted to Complex Investments

Dan SolinAdvisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.

No one is bragging about the index fund they own to their friends.

Indeed, investing is challenging. Clients are often attracted to complex and costly investments, despite evidence that more straightforward and less expensive options provide better returns.

Is the problem with clients, financial advisors, or both?

The “value” elephant in the room

I know no other profession with as much difficulty justifying its value as the advisory profession.

According to research from T. Rowe Price, “assessing the value of financial advice has historically been challenging.”

That’s an understatement.