Don’t get us wrong here. There’s nothing wrong with a do-it-yourself attitude. In fact, there’s something noble about doing things for yourself. But the financial sector is not nearly as straightforward as, say, building your own house or even cooking a fancy dinner. Finance is well outside of the DIY arena, and industry experts draw from intense training, years of practice and immense insider knowledge. When it comes down to managing your wealth—as paltry or substantial as it may be—you want to have an expert at the helm. Your very fortune depends on it.
The following are several reasons that you’re better off getting help from the finance experts:
- Advisors are not going to underestimate your financial needs.
For those who choose to go it alone, it’s easy to underestimate what your actual needs are. If you are like the vast majority of people, you are probably going to need more in your retirement fund than you expect. Likewise, if you are hoping to meet very specific financial goals or benchmarks in the next decade, it could well require significantly more capital (or more time) than you imagine. Getting professional help allows you to set realistic goals.
- Your network isn’t nearly as robust.
Financial advisors operate vast international networks that they can leverage directly to your benefit. It simply goes with the territory of working in the financial sector. Take the services of a mortgage broker as an example. People trying to network their way to a home loan at competitive interest rates have to jump through lots of hoops and initiate contact with multiple firms. And even then, there is nothing even resembling a guarantee that you’re going to get in loan you desire. Financial advisors cut through much of the red tape and paperwork on your behalf.
This simply cannot be stressed enough. Financial advisors excel at creating efficient, high-earning portfolios. It’s literally what they do for a living—every waking hour of their professional lives. Assuming that you do something else for a living, it’s difficult to make a case for going it alone.
As a parallel, imagine everything that goes into the design and manufacture of a car. Sure, given enough time, resources and expert advice, you might be able to build your own car. In fact, it might even be a lot of fun. However, it would most certainly cost you an immense amount of time. In the end, the car might not even run that well (i.e. it might be a petrol guzzler or be subject to frequent maintenance issues). Now, imagine that you were going to start using your car to derive an income once it was built. Wouldn’t it make so much more sense to pay the professionals to make that car for you, so you can start putting it to work as soon as possible.
- Going it alone exposes you to risk.
When it comes to managing a portfolio of assets or investments, securing the help of a financial advisor significantly limits your risk. There is plenty of research out there suggesting that those who decline financial services are in possession of consistently riskier portfolios. The bottom line here is that the experts have a range of tricks up their sleeves that they can use to manage risk, hedge bets and otherwise keep your investments secure. Why expose yourself to risk when it’s simply not necessary?
If you make a mistake whilst going it alone, you could end up losing more than you save. For example, CNN Money reported on a study that took in hundreds of thousands of US tax returns. It found that those who got professional help earned an average of 3% more on their 401ks than those who went it alone.
About the Author:
A company whose clientèle range from local business owners and first home buyers to professionals and overseas property investors, Proper Finance Solutions is a reliable provider of the services of a
mortgage broker.
