Invest on my own vs. Hiring a Financial Planner

Investing
#1

I’m debating on whether to invest on my own, versus going through a financial planner. I’ve talked with a couple of them and what they say seems to make sense. In addition to the fact that I do not have a lot of knowledge of different stocks, bonds, target-date funds, index funds, etc.
In addition I dont want investing to take loads of time and it is appealing for someone else to take care of that.

That being said, the flip side is that I want to learn more and save money that, otherwise I might be paying someone else to manage my money.
Any quick thoughts would be appreciated!

#2

Thank you @sojourner1!

It can depend on your goals and how complex your financial situation is. Just by the fact that you are on this site and asking this question, I can tell your financial knowledge and level of interest in finances is higher than most!

A financial planner can be potentially beneficial to people who 1) have complicated financial lives 2) delegators who want nothing to do with figuring out their finances and likely wouldn’t invest on their own.

My general thought is if you are younger and are trying to accumulate wealth, you would likely be best served by continually investing in low cost index funds. The 1% fee you would be paying a traditional financial advisor could meaningfully eat away at your portfolio over the decades ahead.

However, if you have a more complicated situation (e.g., own investment properties, have your own business, need help navigating retirement spending and taxes), a financial planner could be very valuable to you.

If you do end up going the route of using a financial planner I would ensure it is someone that does more than just manage your investments. They should do financial planning, tax strategy, cash flow management, etc. But again, this is primarily valuable to you if you have a more complicated situation.

I hope this helps!! Let us know if you have any more questions!

Shane

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#3

Thank you for your thorough response. I appreciate it!

I do have a relatively complicated financial life, so good to know that your recommendation is not 100% - ‘do your own investing.’
In addition, I’m 55 years old, have some unique tax issues, have a medium-sized net worth and don’t want to screw things up.
So again, thank you.

#4

Excellent, I’m glad you found it helpful! If you do end up hiring a financial planner, it’s important to work with someone that is knowledgable about:

-tax planning
-social security
-decumulation strategies out of retirement accounts
-anything specific to your situation

I would avoid advisors that are primarily focused on just managing your assets, but find someone that can truly do quality planning work since that is likely most important for you.

PFC content is an excellent resource to continue learning on your own. Outside of that, my personal recommendation would be to start following Andy Panko’s content as well.

-His YouTube channel is “Retirement Planning Demystified”
-He has an excellent Facebook Group called “Taxes In Retirement”
-He has a great podcast called “Retirement Planning Education”

And of course, always keep us posted if we can be of any help! :slight_smile:

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