I like most of what you said, but I’ll have to think about this part.
First–remember that I work for a CPA firm, and we are tax accountants first and investment advisers second (if I ever get there). Stock-picking takes a lot of time, effort, and energy that is probably better spent on tax planning and compliance.
Second, I’m not a stock-picker. Never have been, and probably never will be. Don’t know anything about it. If I knew a good stock-picker, I’d just hire them as a fund manager, instead of doing it myself.
Third, this runs somewhat contrary to my opinion of stock-picking theory. Sure, I believe there are a few Warren Buffetts and Peter Lynches out there that can outperform the market, but they’re few and far between, hard to find in advance, and most managers aren’t worth their price. I think it’s better for most individuals (even the $50m portfolios) to stick with low-cost, low-turnover funds. Not necessarily ETF’s or index funds, but a Davis NY Venture fund, that charges 80 bps and has 6% turnover. (Chris Davis is one of the very few managers that I would take a chance on.)
Fourth, I wouldn’t be a “retail financial advisor” that you’re thinking of. That is, I wouldn’t be selling Mom and Pop a few American Funds mutual funds, a $250k variable life insurance policy, and a $1,000 “get out of debt” plan. I would only be working with our existing client base, and most of them have considerable funds invested in the market already. I wouldn’t be convincing them of the power of investing–just convincing them that they should invest with ME, instead of with Smith Barney or Merrill Lynch.
Remember too–I’ve never really worked with investments too much, save for two months at Ameriprise and six unproductive months at Morgan Stanley. And I’ve certainly never run my own RIA, so I’d be starting from scratch. It’s not as if I’m starting with a company that has $28 billion under management.