Serious question for Ed Norton’s pal: If your financial advisor has so seriously underperformed the index over twenty years why have you retained him?

I'll take that. Thanks to some significant gifts from my father-in-law to my wife, some well timed moves out of high tech around the turn the century and out of Citigroup just before it cratered, as well as discovering value investing just as the tech sector peaked, we find ourselves in a relatively enviable position. My wife trusted me to manage our growing wealth early in our marriage and I was fortunate enough to make more good decisions than bad ones (and there were some bad ones for sure). Through value investing I was able to grow our wealth at a significantly better clip than the S&P, despite my mistakes. Then COVID happened, followed by a very serious illness which befell our family, and for three years I have had to take care of my wife while raising our son and working to support the household. Investing takes time and attention, and, based on the amount of time some of the more well regarded investors on this board spend posting about investments, I don't have nearly the time or energy to do it properly anymore. My wife and I decided that, as she recovers, we would rather enjoy our time together without worrying about the day to day management of our finances. Ours financial goals have also shifted from accumulating wealth to preserving and tapping it.

Value investing has been good to us, especially owning Berkshire, but investing takes time and mistakes come in the form of not just bad investing decisions but also bad tax planning decisions, or bad allocation decisions, or bad withdrawal decisions. Financial planners offer more than stock picking in their repertoire of services. What they offer is the freedom from having to monitor existing investments, research new investments, the tax planning and income strategies in retirement that I lack, and, most importantly, the gift of time to travel and enjoy my family in ways I couldn't when staying on top of our wealth.

There is a price to pay for the freedom we've gained from swallowing my pride and arrogance in accepting the (somewhat costly) help of others. I frequently hear value investors denigrate financial planners, and with good reason if your only financial goal is market beating returns, but they offer more than just investment advice (most are not very good at that anyways). Financial goals change as your wealth grows and as you near retirement. Other considerations than market beating returns enter the equation, especially around tax planning and tax efficient withdrawal strategies. Financial planners, at least good ones, can help in many ways that go beyond just beating the S&P 500.

PP