Several of my friends are brokers, and you cant ask this question without upsetting them, so, I turn to the fine folks on reddit for this one. I understand that brokers can give one access to IPOs that they may not otherwise have access to. I also understand that people think brokers are "experts" at what they do, but there is tons of evidence to support otherwise, although every broker seems to think they can beat the market. Here are my thoughts: - We know that, including transaction costs, its basically impossible to beat the market. Its documented that IPOs under perform the market, which makes sense, because if you are the owner of a company, you'd naturally choose to IPO at a time when the value of your company is highest. Everyone wants to buy the next Google at IPO, but overall IPOs underperform the index and this is documented. Employing a broker will take commissions regardless if they underperform, meet the market, or underperform. So, given this, why do people choose to have a broker put them in generally more risky stocks, when it seems to me that it would be both more prudent and intelligent to pick a market ETF like SPY, which just tracks the S&P500, or some other index, for their entire portfolio? Or, a basket of ETFs that track the overall index. Its easy to fund a discount brokerage account, buy and sell stocks, find information about said companies online. In fact, its never been easier to do these things for yourself; things that, in the 80s, you needed a broker for. So I ask you, why is it that in 2014, individuals are still using portfolio managers and brokers to manage their individual portfolio?