Global View Investment Blog

Financial Planning Trends: Do It Yourself or Hire an Advisor?

Do It Yourself (DIY) is a trend we see a lot these days, and while it can make sense for many endeavors, financial planning isn’t usually one of them. The risks of DIY wealth management and retirement planning can be huge. The chief reason is simple: Investment decisions don’t offer do-overs. One ill-conceived move can inflict catastrophic damage to your wealth.

Financial advisors are equipped to provide the professional guidance that careful savers and investors deserve. A financial advisor’s dispassionate counsel can save you from irrecoverable mistakes. Be careful not to risk your future simply by following the most recent financial planning trends. If you’re in the Carolinas, SC investment advisors can be the difference between retirement success and a retirement nightmare.


The Lawyer Model

Even if you are a financial expert, you might want to consider the advice that lawyers follow: A lawyer who defends himself has a fool for a client. That’s because it is difficult to maintain objective perspective when you are handling your own legal affairs. The same applies to your financial life. While there may be some tasks that you can safely take on yourself, the job of planning your long-term finances is usually best accomplished with objective and expert advice. DIY finances is heavily risk-laden, and the prospects of going it alone should give most people pause. (Read our recent blog post: 5 Ways Investors Sabotage Themselves.)


Customized and Independent Advice

Everyone deserves a full range of services from a financial advisor, who will provide advice targeted to your specific needs. It’s your financial advisor’s job to help you manage your portfolio and maximize your wealth. Investors can receive incredible value from a financial advisor who actively supports all aspects of their financial well-being.

A captive advisor, one who works for a big brand-name firm, works for a financial company and must promote its products. An independent advisor, on the other hand, can respect you as an individual with unique needs that require customized solutions. Independent advisors follow a set of beliefs about the right way to serve clients. They select what tools and practices to employ and what products to recommend, rather than adhering to some company line.


Most Financial Decisions Involve Risk

No one knows the future for certain. It takes experience and expertise to assess the risks of investment decisions as circumstances change over time. A qualified financial advisor can properly counsel you as to how to reduce your financial risks while preserving the opportunity to grow your wealth. Furthermore, a financial advisor can help you adapt to new situations that arise unexpectedly.


Ready to talk with an independent, fee-only, fiduciary financial advisor? Contact Global View to see how we invest right along with our clients and help them best prepare for the future.


Emotion Can Cloud Judgement

Another issue that solo investors should understand is how passions can roil investment decisions. Greed, fear and pride are behavioral tendencies that can undercut investment success by hindering careful assessment of an action’s financial risks. On the other hand, a dispassionate investment advisor can help establish an objective plan that aligns investment decisions with intelligent risk-adjusted strategies.

Sometimes, new clients have trouble opening up about their money. Perhaps there are some unpleasant facts, embarrassments or mistakes he or she is not proud to divulge. This can be self-defeating. When your financial advisor is a fiduciary, he or she is legally held to work on your behalf. Don’t shortchange yourself by withholding important information.


Mistakes Can Extract a Colossal Toll

As a youngster, misspending your allowance had few lasting consequences. But as we age, there’s less time to recover from more significant missteps. One ill-conceived action can quickly undo years of savings and inflict irreversible damage to a person’s retirement plans. It’s the job of a financial advisor to help clients understand the consequences of a misstep. Careful decisions offer the opportunity to grow wealth, whereas quick, careless decisions can spell the difference between a comfortable retirement and no retirement at all. Your finances are too important to leave to chance.


Planning for Ups and Downs

Market volatility stirs the emotions because it has the potential to erode a person’s net worth. Taking the right steps ahead of time to insulate your wealth against future market fluctuations can pay huge in the long run. And starting with an advisor is an important first step.

It’s hard not to react when markets make sudden, large moves. Greed and fear are natural human emotions that, if given free reign, can lead investors to buy high and sell low. That’s a recipe for wealth destruction.

The time to handle market fluctuations is before they happen. Planning starts with an understanding of how your portfolio will react to volatility, and then making moves to restructure your wealth to fit your risk profile.

Asset allocation is key. Diversifying your investments across a broad set of asset types is a central feature of your wealth planning. Knowing your tolerance to risk, stage of life and need for liquidity should shape your asset allocation so you can tolerate volatility without it triggering sudden, unplanned reactions.


Good Financial Advisors Can Offer a Holistic Viewpoint

Your finances encompass many facets that should work together to help you reach your goals. Those facets cover all the areas of your financial life, including strategic planning for investments, retirement, taxes, insurance, estates and charitable giving. Financial advisors, and in your case, SC investment advisors, who understand how each piece of the puzzle affects the overall result, using knowledge and training, is an element that many DIYers lack. An advisor should be able to provide you with advice that’s backed by independent research, state-of-the-art technology and innovative business models. It’s an advisor’s job to help you preserve and grow your wealth.

A good financial advisor also has planning tools. When you work with a skilled wealth advisor, you have access to these sophisticated tools that can show how your portfolio will react to various market scenarios. Together, you and your advisor can restructure your portfolio to match your risk profile. A properly structured portfolio will help you resist the knee-jerk impulse to do something when markets jump.


Replace Concern with Confidence

A financial advisor should work with you to develop a custom plan that preserves your wealth through all market environments. Together, you and your advisor can reorganize your assets to provide the peace of mind you need to sail through periods of market volatility without undue concern.

As you can see, your financial future should be based on way more than just financial planning trends.

If you’re looking for a fiduciary financial advisor in the Carolinas, contact Global View to see how we can help.


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Adam Wiles

Written by Adam Wiles

Adam is a Partner at Global View. Adam’s primary focus is on investment strategy, retirement planning, risk management, and new client identification. He has extensive experience and training in identifying client’s needs and explaining the solutions that meet those needs. He worked with Merrill Lynch for 2 years prior to joining Global View. Prior to Merrill Lynch, Adam worked 10 years, in several trading capacities, within the Commodity Lumber business.

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