Are advisors better than palm readers?

MarketWatch recently put the tired cliché that financial advising is like palm reading to the test.

After Scott Adams, creator of comic strip Dilbert, compared advisors to palm readers, reporter Priya Anand decided to get investment advice from both parties, and compare the results.

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She asked both the advisor and the reader a set of questions, including whether she should be an active or passive investor, where she should invest her money, and how much to put aside for retirement.

On some questions, such as whether to expect a crash—the palm reader and the advisor disagreed. (She says no, he says yes.) But on other points, such as how to invest, both said to choose smaller companies over large.

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The difference is, the palm reader was going by her senses, while the advisor was able to explain the reasoning behind his decisions.

Read more here, and judge for yourself whether the advisor demonstrated his value.

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Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.