What's the real value of working with a Financial Advisor?
It seems you can do just about anything by yourself these days. During the pandemic, many of us learned a new skill, either out of necessity or boredom.
Sourdough bread? Check.
Furniture makeover? Check.
Snow removal? Landscaping? Check. Check.
Fitness plan? Check.
Financial plan? Maybe.
When it comes to your finances, do you really want to do it yourself? Sure, it’s nice to work with an advisor, but do you need one? As you might imagine, there are pros and cons to working with an advisor versus going it alone when it comes to financial planning. Let’s discuss.
“I’ve made it this far on my own,” might be your thinking when it comes to finances, so why do I need an advisor? Many people have done just fine managing their own finances. Indeed, a sizable portion of the population enjoys watching the markets, budgeting, and analyzing their next move. Yet there is a question to be considered: have you done everything to optimize what is available to you?
Of course, if you are managing finances on your own, you are not paying an advisor a fee for advice or investment management, resulting in cost savings for you and your family. If you put those savings back into your portfolio rather than spending, it could result in more money for your future goals.
Financial planning is personal. We all have ideas and values when it comes to money, and for many people talking about money is taboo. “My finances are no one else’s business,” may be your philosophy, and if that’s the case, being a “do-it-yourselfer" could be the best solution for you and your finances.
Let’s look at a few reasons you might want to think about shifting your mindset and working with a professional financial advisor:
Your time is valuable. The time you spend working on your finances could be delegated to a financial professional. You could then spend that time on something else: career, family, rest.
As mentioned above, finances are personal. Sometimes our emotions take the lead, and that’s not necessarily a good thing when making decisions about money. Have you been excited to watch an investment climb, only to hold it too long and then watch it decline? Advisors help you walk through hard data and provide an independent, non-emotional perspective.
What is your strategy? Financial advisors are generally helpful not because of their “magic formula” for higher returns, but because of their measured approach and experience. One size does not fit all when it comes to financial planning. From putting the right piece of insurance in place at the right time to actively rebalancing investments, to tax-loss harvesting, a financial professional can implement strategies that may not be instinctive for you. Though there is a monetary cost, there is often a monetary benefit to knowing all your options when it comes to integrated, optimized financial planning.
Behind every great advisor is a great team. Executing strategies, moving money, and saving into the appropriate accounts are time sensitive and often tedious. Being able to reach an advisor or team member without calling an 800-number and having the confidence you are making the proper moves, can be a real advantage to working with an advisor.
Advisors and their teams keep an eye on the ever-changing world of financial planning tools, rules, and regulations. Are you allowed to contribute to certain accounts? Are you allowed to distribute from certain accounts? What is the best way to save for the next generation? An advisor can walk through your options.
While you’re walking together, your advisor can be an accountability partner. Did you invest as you had planned? Did you make those financial changes that you were planning to “get around to”? Most people do better when someone’s following up and encouraging them to take next steps.
When you look at your DIY projects, have you nailed them or failed them? Sure, you can do it yourself. You can do just about anything yourself. Is it worth your time and effort to do so? While there is a cost to working with a professional, there is also a reward: a personalized strategy that is an investment in your financial fitness that will strengthen and optimize your unique values today, tomorrow, and for generations to come.
If you’d like to explore how your financial planning can go beyond your expectations, reach out to our team today: [email protected].