In the spirit of July 4th, which is coming up, this series of videos will continue to explore why you should be proud to be an American investor. The two areas I’d like to discuss today are optionality and a democratized investment landscape.
Optionality: Investors have options for how they want to handle their investment business. There are platforms catered to “Do-It-Yourself” investors and there are many wealth management firms for those who prefer to work with a financial advisor. There are also options for how one prefers to work with an advisor. Investors can choose someone who charges an hourly rate for a quick consultation, pay a project-based rate for consulting on a specific area of financial planning, or opt for white glove service including ongoing personal advice and plan implementation from an advisor who charges a percentage of assets under management. The only model investors should avoid are those where the “advisor” gets compensated on commission by exclusively selling proprietary products from the firm which employs them. However, if an investor wants to go down that route, in the U.S. you have the freedom to choose that business model as well.
Democratized investment landscape: One of the beauties of the investment landscape in the United States is that both the rich and poor can access the best investment options with ease. A company’s janitor and CEO can both invest in the same 401(k) plan with all the same investment options. Over years of disciplined investing even a modest amount of funds can grow to be a substantial nest egg.