Does everyone need a Financial Advisor?
No. Not everyone needs a Financial Advisor.
You didn’t think the post would be that short, did you?
I take a great deal of pride in my work and believe wholeheartedly in the value of what I do.
But I also recognize that not everyone needs me (or someone like me) in their lives.
If you are DIY, happy, and getting the results you want, read no further.
But, if you are willing to entertain the possibility that you might need me, please indulge me while I examine times when going it alone likely isn’t the best option.
Lack of Time, Lack of Expertise
For some folks, money and investing are a hobby.
They enjoy doing research, selecting securities, and building portfolios.
Because it’s an area of interest, they’ve taken time to study and become educated. And because they enjoy the work, they make time for it.
If that’s you, carry on.
But what if you have little to no interest in investing, don’t have the time to dedicate to building and maintaining a portfolio, or lack confidence in your investment choices?
The services of a good Financial Advisor could give you some real peace of mind.
A good Financial Advisor will make sure you aren’t taking too much risk, help you select investments that suit your goals and objectives, and keep your portfolio well-maintained.
They will do what they are good at so you can focus on what you are good at.
I’ve seen some investors who can make clear-headed, dispassionate, rules-based investing decisions with ease.
Many of them are professionals, though individual retail investors can be just as disciplined.
But often, individual investors are not.
Humans are plagued by dozens of cognitive errors and biases that make investing harder than it should be.
It is way too easy to make mistakes, and those mistakes can be costly.
One role that a Financial Advisor can play in your life is to help you maintain investing and behavioral discipline, so you avoid those costly mistakes.
A good Financial Advisor will stop you from giving in to greed or fear, and help you maintain the positive habits that can lead to more desirable investing outcomes.
You’ve Got Plans
At a certain point, planning for your future can get complicated.
If all you need to do is build an emergency fund and save for a home down payment, you don’t need an expert — just a calculator.
But when you need to save and invest for retirement, save and invest for your kids’ college education, pay off your own student loans, and maybe take care of an aging parent, all while enjoying the money you work so hard to earn… you’re juggling quite a lot.
It’s going to take more than simple math to figure out a path forward.
Not every Financial Advisor does Financial Planning.
But those who use Financial Planning in their practices like I do can help you find a balance and make confident decisions.
If you’ve got a destination in mind but the path is unclear, a Financial Advisor who can offer you a Financial Plan could be life-changing.
It would be the height of hubris to presume that everyone needs a Financial Advisor.
In fact, I’ve turned away prospective clients precisely because they did not need me.
I ask only that you make room for the possibility that a Financial Advisor may have a role to play in your financial life now or in the future.
And if the time comes that you need me, I’ll be here.