[stevep001]

It only takes about 30 seconds to show that the BH site is anything but dogmatic. For example, check out the Hedgefundie thread on risk parity investing using leveraged ETFs (now at 9000 posts):

https://www.bogleheads.org/forum/viewtopic.php?f=10&t=288192

or this recent post on factor investing:

https://www.bogleheads.org/forum/viewtopic.php?f=10&t=257223 as proof of the board's openmindedness.

The bread and butter for BH is the unsophisticated investor who is paying their Edward Jones advisor 1-2% for an overly complicated, underperforming portfolio. These folks are better served by a simple plan (like the three fund portfolio) that they administer themselves. Their success in investing is mostly driven by advice to save and maintain long term exposure to the market. Saving that 1-2% makes a meaningful difference in their retirement lifestyle. Ordinary people can come with their portfolios and get free, unbiased financial advice that saves them thousands of dollars a year.

Investing discussions are the tip of the iceberg, though. Anything related to personal finance is germane. Discussions of tax planning, estate planning, withdrawal strategies, with participants who are experts in the field, are invaluable. For example, this long running thread with monthly posts that tracks a forward test of a mechanistic Variable Percentage Withdrawal strategy (as an alternative to the 4% rule):

https://www.bogleheads.org/forum/viewtopic.php?f=10&t=284519

Personal Consumer Issues section is golden for advice on purchases.

It's real secret, though, is the heavy moderation. It is very strongly curated around its subject matter, and in particular its "no politics" and "posts must be actionable" policies work to ensure that it has a very high signal-to-noise ratio.

[throw0101a]

> Saving that 1-2% makes a meaningful difference in their retirement lifestyle.

If you really want to see how much a few fractions of a percentage point can effect things a fellow named Larry Bates has a really good interactive page where you can enter various numbers:

* https://larrybates.ca/t-rex-score/

Starting with $100K, with returns of 5%, over 25 years:

* a 2% fee will net you $209K at the end

* a 1% fee wil net $266K

* a 0.50% fee will result in $300K

1.5% eaten away in annual fees, compounded over 25 years, sure adds up.

[simonebrunozzi]

I keep telling this to a friend of mine with a net worth in the single digit million $.

He pays (I think) 1.5%/year for a personal financial advisor, he says he's happy with it, but when I ask him what's the "alpha" [0] compared to, say, the S&P 500, he doesn't know. Ten years of huge growth in the stock market surely doesn't provide an incentive for him to investigate.

[0]: https://en.wikipedia.org/wiki/Alpha_(finance)

[nabla9]

Investing style and method must match the temperament of the investor.

Your fried may not have the temperament that is suitable for managing investment decisions, even passively Bogglehead style. He may get better return by just paying 1.5% and staying completely ignorant and intentionally avoiding any knowledge. Paying 1.5% fee for the luxury of staying ignorant is still better than putting all money into inflation protected treasury bonds. Never try to push investment advice to your friends.

Burton Malkiel (author of A Random Walk Down Wall Street) has a great story: https://youtu.be/wnCxlIQjT-s?t=3949

[NordSteve]

Paying an advisor doesn't solve the problem - how do you pick the advisor? That is actually a harder problem than implementing a three fund portfolio, and has even more emotional burden because successful advisors are good at making it emotionally difficult to quit.

[nabla9]

It should not matter. You just pick the most boring and average no-name advisor from a firm or a bank.

[icelancer]

A very good reason to pay an personal advisor is to structure your income, existing wealth, and businesses (et al) for optimal tax avoidance and tax-advantaged growth. These are fairly nuanced topics that are hard to do on your own, so it's possible that your friend is getting advice / action along those lines.

Obviously if it's 1.5% on AUM/year for stock picking advice, it's almost certainly not worth it. But you never know.

[ed25519FUUU]

Other than perhaps tax-loss harvesting and muni bonds, my experience is that financial advisors know next to nothing about taxes. They aren’t accountants, and only know securities and derivatives and other basic investment vehicles.

They might have access to some exotic things that could be tax-advantaged, but again they aren’t accountants, and could care less what you pay on your gains.

In fact I would wager to say skillful accountants might have better investing advice for the rich than most any financial advisor.

[throw0101a]

> He pays (I think) 1.5%/year for a personal financial advisor

The financial part is solved nowadays with various low-fee funds. However, an advisor can still be useful for things tax accounting, estate planning, and general personal behavioural sanity checks.

So if he's paying that for the funds it is probably too much, but if it is for the services there may be some value there.

[atombender]

This is a good investing fee calculator that I use to demonstrate to people how fees matter: https://www.investingfees.com/.