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gwern comments on Financial Effectiveness Repository - Less Wrong Discussion
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Tell me something: what sort of people do you suppose would seek out a financial advisor and take their advice? Do you think all unobserved traits can be completely described & modeled as a single linear weight of 'income levels'?
Seek out? Fewer than you'd think bother to seek advice. Most people seem to stumble into it. And while this is anecdote and not data, the ones most likely to take my advice are the ones who don't want to be bothered doing it themselves, far more than any other single trait.
And no, I don't think all variables can be compensated for. However, I think that a study that tries reasonably hard to do so still does provide evidence, if evidence less convincing than the fluff makes it out to be. But it's certainly much stronger than "rich people get more advisors".
Of the people who would look up and carry out the financial advice themselves an the ones who come to an adviser to carry it out, there may be some imbalance in terms of wanting to bother. Both groups are still highly selected compared to the general population: as you say, "Fewer than you'd think bother to seek advice." The results are entirely explicable by the default of self-selection, and that's much more plausible than advisors matter all that much. (Consider the example of SAT coaching...)
Where's the randomized beef?
Give me a practical model for a randomized study, please. Until you have that, let's work with the evidence we have available. And that evidence seems pretty consistent with my beliefs(that I've had since before I started this job) that advisors don't meaningfully improve investment returns per se, but they mildly improve investor tax planning, and they massively improve investor behaviour.
Self-selection is the default explanation; the onus is on financial planners to show that they are helpful.
You could... I don't know, select some people, offer half of them $1k to go to a financial planner and the others $1k in exchange for reporting on financial health, then see if the experimental group is better off a year later? This is not harder than doing things like deworming studies in Africa.