From a practical standpoint, this bothers me greatly.
I have yet to sit down with a 'financial advisor' who can have an intelligent discussion about an option with 24 hours until expiration. What's my delta? Gamma? Theta? What can I do if I am long the option? Perhaps a set of unfair questions, but shouldn't an advisor be able to advise you? Shows them up for being the salesmen that they are. For 3% a year I expect something better than telling me to dollar cost average into their 'proprietary' (read: curve-fitted) MPT allocation mix and 'stay the course'.
And there's the problem - if something happens to me, who will advise my family financially? Perhaps better to just put the nut into a mixture of different maturity Treasuries and TIPS with a moderate exposure to SPY and VGTSX and hope for the best. I have no confidence that some of these folks wouldn't allocate my portfolio into Class A 5% load funds and change them annually for fresh commission.
What I would pay 1% of assets p.a. for is free execution (like UBS did) and someone I could call up on the phone and have the following conversation with:
"Hey there. Pull up my portfolio. I just put on size in GC strads in June and am a little concerned."
"Well, let me run this through my supercomputer. Ok. Model predicts likely rise in volatility in GC so suggest we delta hedge aggressively - here are my suggested pivots: ....... Now, by the way, I note that you have a profitable position in palladium that isn't going anywhere right now - in a sideways channel. However, model shows if your GC position profits, correlation coefficient to your overall portfolio doubles to 1.2 and you may give back some of those gains. Want to take some profits and scale back the position to reduce the net effect on your portfolio? My buddy over at goldy told me he had closed out that trade recently. Negligible effects on the rest of the portfolio, by the way."
"OK. Sounds like a good idea. Where is it? Sell half."
That's what I want in a financial advisor - advice, and someone who has access to tools, computing power, and breadth of market information THAT I DON'T HAVE. If you can't give me value added, then the only added value is to YOU!
Of course, the reality is that such an individual probably can't be found in the under $100 mio USD range, and I freely admit I don't qualify, so what I want and what I get are two different things. That's why I rely upon myself.
