Peek Inside A Pilferer's Playbook

If you've read what I've written so far about indexed investing, I hope that you're planning to open your own indexed account. Or perhaps you'll want to find a fee-only adviser who can set it up for you.

Either way, if you currently have a financial adviser buying you actively managed mutual funds, you're probably thinking of making the split.

That might be easier said than done. I like to think that the majority of investors who have attended my seminars have decided to index their investments—to save costs and taxes—while building larger accounts than they would have done with baskets of less-efficient products. But not all have. I know many would-be indexers spoke to their financial advisers, fully intending to break free, but the advisers' sales pitch froze them in their tracks.

Many financial advisers have mental playbooks designed to deter would-be index investors and they initiate their strategies with remarkable success, metaphorically ensuring that their clients continue climbing Mount Kilimanjaro with 50-pound packs on their backs.

How Will Most Financial Advisers Fight You?

Often, when a friend or family member wants to open an investment account, he or she asks me to come along. Beforehand, I briefly talk to the new investor about the markets, how they work, and the merits of index investing. I tell the person that every single academic study done on mutual fund investing points to the same conclusion: to give yourself the best ...

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