Kim, Hugh HoikwangMaurer, RaimondMitchell, Olivia S2023-05-232023-05-232016-05-012019-03-06https://repository.upenn.edu/handle/20.500.14332/43943Using a theoretical life cycle model, we evaluate how much workers benefit from having the option to hire a financial advisor when it is costly for employees to rebalance their own financial portfolios. Results indicate that having access to a financial advisor at the start of one’s career can be quite beneficial. If delegation to an advisor is available only a decade after entering the labor market, the benefit of delegation is cut by half, and it falls further if delegation is available only later in life (at age 60). We also examine whether simpler target date funds (TDF) and fixed-weight portfolios benefit consumers, compared to the outcomes with customized financial advice. We show that the simpler portfolio products would need to be provided at zero cost, in order to benefit consumers as much as having access to a financial advisor.All findings, interpretations, and conclusions of this paper represent the views of the author(s) and not those of the Wharton School or the Pension Research Council. © 2016 Pension Research Council of the Wharton School of the University of Pennsylvania. All rights reserved.G11, D14, D91Portfolio inertialife cycle savinghousehold financehuman capitalfinancial adviceFinanceWorking Paper