A financial advisor’s job is not only to beat the market. They help you in many ways. There are many tools available to help individuals manage their finances. There are free calculators to compute for your retirement. Portfolio analyzers and personal finance apps are also easy to access. There are also robo-advisors to help you plan your finances. These are programs that use artificial intelligence.
Given all the information, shouldn’t you do it yourself and save money in the process? Is hiring a financial advisor worth the cost? It depends on a lot of factors. Here are reasons why you should hire a financial advisor than manage your money yourself.
- Information overload
Information can empower us to make educated decisions. It can also overwhelm us and cause analysis paralysis. Having information does not always equal to understanding. It is best to have information if it leads us to make a decision. But we cannot do anything if it causes us to procrastinate. Fear of making the wrong decision will not do us any good. A financial advisor will help you sort through various information sources. The advisor will also help you tune out the noise and make the best decision.
- Too many choices
There are a lot of mutual funds and exchange-traded funds for investors to pick from. It is difficult to choose and it will take time. Financial advisors usually have lists of go-to investments. They already did research on these. An advisor will help you sort through the financial supermarket of choices.
- Too little time
We could learn what we need to learn. But time is of the essence. A financial advisor may free up your time. This can help you concentrate on doing something else. You can make more money at work or spend more time with your family.
- Lack of expertise
Specialists have particular expertise. There are those who specialize in times of transition. This includes selling a business or planning for a divorce. There are also those who focus on an industry. Such as working with dentists or teachers. Advisors developed unique expertise in their field from years of experience. A specialized advisor may be a big help if you have a unique situation.
- Personal biases
Managing your money is a personal preference. It has its advantages and disadvantages. You need to know what you need. Hiring a financial advisor prevents you to make rash emotional decisions. An advisor helps you make logical and rational decisions.
Hiring a financial advisor is not advisable for everyone. You can be good on your own if you enjoy personal financial planning and has the time to do it. Especially if you have the emotional intelligence to recognize your own needs. A professional help might be worth considering if you want to spend your time elsewhere. Or if you need specific expertise.