I’m intimidated by my financial adviser, he knows how little I know.

Daniel Kahneman Nobel Laurite and author of Thinking Fast and Slow

The Wall Street Journal shared an interesting piece about Bill Gross’s old fund with Janus Capital back in 2015. Investors poured in $1.1 billion, which is an important threshold for attracting institutional clients, into his brand-new unconstrained bond fund. That’s a decent haul, but the real scoop here was that more than $700 million of those inflows came from the same Morgan Stanley office in California.  

And it just so happens that this is the office that one of Gross’s financial advisors works.

The thing I find fascinating about this is not that this money came from Gross himself, but that Bill Gross, the Bond King, has his own financial advisor, from Morgan Stanley no less. Gross is worth 2.5 Billion dollars, so he could have his own family office if he wanted to. But I think it would surprise people to discover that one of the greatest investors of all-time has the need for a financial advisor to help manage his investments.

There are several reasons for Gross having a team of financial advisors in place — tax considerations, trust and estate issues, insurance planning and many of the other financial planning complexities that come with having a huge portfolio.

But what we find at GIM is that most successful people, even those that are successful in the world of finance and business, get their own financial advisor to keep themselves out of trouble. Intelligent people understand the benefits of having an independent third party there to make sure they don’t make huge mistakes.

In the book “What Investors Really Want”Meir Statman shared the following story about Oracle CEO Larry Ellison whose net worth is a measly $60+ Billion (emphasis mine):

Documents in a trial revealed that Mr. Ellison lives well. His annual “lifestyle” expenses amount to $20 million. A villa in Japan costs $25 million, a new yacht costs $194 million, and preparations for America’s Cup cost $80 million. The documents include emails to Ellison from his financial advisor. One email said, “I know this email may/will depress you. However, I believe it’s my job to address issues you’d prefer not to confront. You told me years ago that it’s OK to raise the “diversification issue” with you quarterly…. Well, I’m doing it. View this as a call to arms.

Not everyone needs a financial advisor.

But there are many people out there that could benefit from a call to arms on occasion to keep themselves honest. This is true of successful fund managers, financial advisors, corporate CEOs and anyone else that recognizes they’re not infallible when trying to make wise financial choices.

There are plenty of financial issues most people would prefer not to confront. A good advisor should be able to help you take on those challenges.

If you’re interested in adding some checks and balances to your financial life, then please get in contact with us.