Having a financial advisor vs. doing it yourself

There isn’t one perfect way to invest, but there are different aspects to consider when evaluating if you should work with an advisor or do it all on your own. Understanding both options will help you decide which approach is best for you.  

You might think  that financial planning just means picking investments and letting time do the rest, but that’s only the first step. 

Building a financial plan is an ongoing process. Your investments need to withstand the ups and downs of the market, as well as changes in your personal life that could affect your plans. That said, you may not always be in the headspace to give your investments the time and research they need to stay protected and continue to grow. 

This is where an advisor can help. They can give your financial plan the time, resources, and expertise it needs to make the most of new opportunities that could maximize your savings and help you achieve your goals.

Another great thing about having an advisor is that they can provide as much or as little help as you need, and it’s advice that’s just for you and your situation. Whether you need help with every step of the process or just want advice on setting a goal or picking investments, you decide what approach you’d like to take with an advisor. Whatever the situation, an advisor is there to meet you where you’re at in your journey and support you through every stage.  

There are a lot of aspects to keep track of when it comes to retirement planning: pension timing, group savings benefits, navigating RRIF/LIF rules, tax strategies.

Trying to manage everything alone can be overwhelming. Unlike other avenues for investing, the do it yourself space doesn’t offer much clear, accessible guidance on retirement planning, so you might not have the right resources to ensure your retirement plan is sustainable.

The good news is that an advisor can make a big difference here. Canadians with an advisor are 85% more likely to report having a complete and detailed retirement plan.

Even if you’re familiar with some parts of retirement planning, having an expert on your side is always a smart move. They can help you refine your plan and find ways to grow your wealth for the long term.

Apart from helping you save, invest, and retire with confidence, advisors can also help you:

• Save money on tax
• Plan your estate
• Manage risk during uncertain times
• Avoid missing out on gains when markets recover

Whatever you choose to get advice on, an advisor can help you manage any concerns you may have about your finances. Canadians with an advisor are 51% less likely to report being worried about financial difficulty in the next year.

Advisors can also help boost your confidence about investments, with 65% of Canadians with a financial advisor saying they’re knowledgeable about selecting and managing their own investments.

Many people who choose to invest on their own sometimes believe they can do half the work required to build a financial plan and expect full results. They often say, "I can earn better returns on my own," or "Advisors are too expensive."

By believing they can handle everything themselves, individual investors don’t consider the cost a financial decision can have on their long-term plans. When the market takes a downturn, it’s a common mistake with DIY investing to let emotions drive decisions, which can be much more costly than having an advisor. Some employers include financial advice with their group plan offering, which means you’d be able to avoid making these mistakes at no additional cost.

The lesson here is that financial planning requires time and expertise. While DIY financial planning is possible, it demands exactly that: time and expertise to follow through with your plan after selecting your investments.

You don’t want to take on more than you can handle and miss out on opportunities to enhance your savings. This is a common mistake that a financial advisor can easily help you avoid.

Choosing the right investments can be straightforward, and for some, even choosing investments can be overwhelming since there are so many options to choose from. Wherever you find yourself in the process of financial planning, an advisor’s help goes far beyond just picking investments. They can simplify all the technical information into practical advice that addresses your specific needs. And their advice goes beyond retirement, whether that means helping you set other financial goals, building plans to achieve them, maximizing your investments, or even just checking in on your progress as a DIY investor.

It’s not impossible to do it yourself, but the support of an advisor can be incredibly valuable. Their guidance can save you time and stress, so you can focus on other things.

Working with an expert could be the next big step in protecting and growing your wealth. Why not take it?