If you can find a great financial coach, who shows you how to save as much tax as possible, strategies to accelerate the growth of your net worth, protect your family and future dreams in any event, a higher mer may be worth it to many.
I would challenge that the net worths would be similar in both cases and the success of their plan even more protected.
If you want to do it alone, go for it, you don’t need an advisor. Go for the cheap penny pinching products.
But for many, it could mean success or utter failure down the road.
My 2 cents. Yes, I am an advisor.

I went thru 5 different advisors over a span of 10 years and accomplished nothing, that was 8 years ago. Then I started educating myself and investing on my own for the last 8 years and I haven’t looked back.

For all the engineers out there I submit to you two formulas based on my experience:

Formula #1:
A = B
where:
A = effort spent on learning about mutual funds, MERs, and finding the right advisor
B = effort spent on learning about value investing

Formula #2:
V > M
where:
V = the return on my investments over the last 8 years using value investing
M = the return on my investments by investing in mutual funds, spanning 10 years

Finding the advisors who are well versed in the areas beyond just investments is harder still….but I believe it in these areas where most of the value is delivered. The search is worth the time, in my opinion.

The fee-only thing is nice in terms of transparency, but I am not sure they are always the most talented. Certainly there are some good ones out there but I think finding them is just as difficult. Lastly, biases certainly exist in the fee-only model as well.

CC is absolutely right that one has to educate oneself to the point one can at least pick out a good advisor. If you don’t at least do that much, your chances for success are pretty limited.

Also, your point on financial advisors providing value in other areas of financial planning is well taken. My comment on everyone can learn only applies to the investment part. Unless an investor’s affairs are quite simple, they might need help in other areas and might have to seek out a fee-only advisor.

My point is it is the investor’s responsibility to educate themselves enough to at least be able to tell who is a competent advisor. My friend, for instance, has no problem paying for investment advice (she has no inclination to educate herself). The fees are transparent and the advisor provides honest services in return that includes other areas of financial planning that you mention.

I also learned about investing from buying “Personal Finance For Canadians for Dummies”. This was the best $20 I ever spent. I also found the Financial Webring (http://www.financialwebring.com/) and this article called “Can you afford to invest in mutual funds” ( http://www.bylo.org/affordmf.html).

I was so shocked when I learned how much my fees were costing me. Basically, I cried. Once I got over the shock and horror, I got educated and smart(er). I learned how keeping costs low is very important. If mutual funds are your interest, there are fund companies like PH&N (www.phn.com) who offer exceptional value for very low cost. There’s also the index method the CC employs. The trick is to read lots, and decide what is best for you.

Where can I educate myself on how these fees are calculated? So that I can better understand how this all works? I’m confused by all the literature and “advisor speak” when it comes to these things. My advisor said something to the line of “it’s a straight 2% off the top”. But I’m still not sure what ALL of fees really are, and non of my statements seem to reflect this. (The MER on my fund is 2.37%).

What are the right questions to ask my advisor to get the straight goods on all the fees?

At the same time, there is more to financial advising than just keeping your costs low. Taxes, insurance, debt management, managing investor behaviour, wills and POAs, the different types of plans and the myriad of rules and strategies for each is confusing. That doesn’t mean every “advisor” is well-versed in these other areas, or willing to spend unprofitable time helping clients in these areas.

I’m a reasonably bright guy, and have been an advisor for 17 years yet I am still learning things, and still look stuff up. I often think when doing my own stuff that I don’t know how people do this effectively on their own.

I think to properly DIY you have to be interested in it, and almost make it a hobby. The CC for example is a DIY that is better than 99% of the advisors I have ever met. He comes across as disicplined, birght, willing to studies issues, analyzes things , and fortunately for many, he shares what he learns. The CC definitley does not need an advisor, in my opinion. But to just go in ETFs, and neglect these other areas of personal finance (like so many do) is a recipe for disaster.

You hear a lot of stories about people’s bad experience going the advisor route. They tell you how bought some labour sponsored fund, or some hot fund of the week…really trying to make a quicker buck as opposed to strategizing out a plan and hiring competent help. Let’s face it, if you don’t care what you pay in fees, what you buy in terms of quality, or the advice you receive, then there are a tonne of salespeople willing to sell you crap. But this is true in EVERY industry.

I explain to every client exactly what they pay on every recomendation. I don’t want any secrets with my clients. Only if they understand exactly how and what they are paying can they determine whether they are getting value. If anyone feels they aren’t receiving value for what they pay, then they should transfer their account to someone else.

It really is simple. You must know what you’re paying so keep asking questions until you do understand. Make notes so you don’t forget. If you don’t feel you are getting more value than what you are paying, then change advisors or try it yourself. Simple.