Should I Use a Financial Advisor or Do It Myself?

From relying on expert advice to augmenting your own skill with consulting and tech, here are eight answers to the question, “Based on your reasoning or strategies, would you recommend someone use a financial advisor, or would you manage your investments yourself?”

• Decide Based on the Venture
• Advisor – Get Outside Expertise
• Advisor – Fill in the Knowledge Gaps
• Yourself – Stick to What You Know
• Advisor – But Also Do Your Research
• Yourself- Try Dollar Cost Averaging
• Yourself – Take Control of Your Investments
• Yourself – Use Tech and Consult

Decide Based on the Venture

I both use a financial advisor to manage some of my investments and manage them myself. With my investments, I take things seriously and want to ensure I am in control of my finances with informed decisions. 

I typically consider the size and scope of an investment before deciding if I should seek expert advice or opt for self-management. For example, if I’m looking at a high-risk venture, such as investing in early-stage companies or startups, then I will probably seek more experienced professional help because of their availability of expertise that may influence the venture’s performance. 

In contrast, if it is a relatively safer investment like mutual funds, then self-management would be better since these are fairly straightforward investments that require less technical management or expertise from professionals. 

So, I believe that this multi-pronged approach offers the best of both worlds for investment.

Maria Harutyunyan, Co-Founder, Loopex Digital

Advisor – Get Outside Expertise

Despite working in the financial industry, I still recommend working with a financial advisor. If your financial and tax position is complex, a financial advisor offers expertise and strategy for your specific financial situation. 

When you have various investments, many ranging in type, a financial advisor can assist you in managing them. They can also make recommendations for new investments and identify when a particular investment isn’t contributing to the health of your portfolio. 

Investments are complicated, and you want an expert on your side to help you manage them, even if you’re a financial expert yourself.

Sacha Ferrandi, Founder and Principal, Source Capital

Advisor – Fill in Knowledge Gaps

I’m a financial advisor specializing in annuities and life insurance, but even I have financial advisors to manage my investments in areas outside my expertise. 

For example, if I want to invest in mutual funds, I have a financial advisor who helps me figure out what mutual funds are best for me based on my goals and risk tolerance. When choosing a financial advisor, I interview a few different advisors before I make my decision. 

I always have a list of questions prepared to ask prospective advisors to determine if they would be a good fit. What I look for is an advisor who is knowledgeable about the current market and shares my personal values about investing.

Shawn Plummer, CEO, The Annuity Expert

Yourself – Stick to What You Know

I’ve always done my own investing. I’ve been successful by choosing stocks of companies in my field and following their progress. I’ve been able to make good choices and do well. 

My advice is to stick to what you know. I’ve always been good at math, and I love researching companies. When I started investing, I studied how to read company financial reports, so I could understand how a company is doing and how strong it was financially. I’ve done well by investing on my own in stocks that I know a lot about, but if you’re not good at math or don’t know much about investing, hire a financial advisor. But if you’re good at math and enjoy researching companies, you can do well by investing in stocks yourself.

Luciano Colos, Founder and CEO, PitchGrade

Advisor – But Also Do Your Research

Having a financial advisor is something I highly recommend for the sheer time and effort it saves. That said, I’d also encourage you to do your own bit of research too—not only to influence your investment decisions but also to ensure that you understand what’s happening with your money. 

For investments, there are high-risk options that offer you higher returns but also carry many risks. And then some are relatively safe but offer meager returns. In doing your own research, you’ll be able to direct your advisor toward your choices so that your investments reflect your broader risk and growth choices, not your advisor’s.

Brendan McGreevy, Head of Strategy, Affinda

Yourself – Try Dollar Cost Averaging

I take charge of my financial investments and employ a dollar-cost-averaging strategy. With this approach, I focus on investing a fixed amount of money in different instruments, including stocks and cryptocurrencies in my portfolio, no matter the state of the market. 

The reason why I went with dollar-cost averaging is that it allows me to diversify my portfolio while, at the same time, I can manage risk. Using this strategy allows me to buy more assets when the market is low and less when prices are high. My risk is kept low, and over the long run, returns are guaranteed.

Alvin Wei, Co-Founder and CMO, SEOAnt

Yourself – Take Control of Your Investments

I manage my own investments, which gives me 100% control and autonomy over where my money is going. Most advisors try to push you toward a specific fund or group of funds based on the commission they will receive. This limits your options and also cuts into your gains since they charge a fee on your total investment. 

The fees can have an enormous impact when you compound them over a 30-40-year time span. From a research perspective, there are plenty of online tools that allow you to research all the options out there.

Matthew Wright, Partner, Surety Systems, Inc.

Yourself – Use Tech and Consult

I manage my own investments because I follow a simple investing strategy, so I don’t see the need for a financial advisor to assist me. However, my strategy was developed through years of research and experience. 

If you are new to any kind of investing, it’s better to consult a financial advisor. To effectively manage my investments, I leverage the power of modern technology. I use Google Sheets to manage, update, and track my portfolio, which mainly comprises securities, such as equity funds, individual stocks, and bonds. 

When choosing an equity fund, I stick to index funds to avoid the fees of actively managed mutual funds. For individual stocks, I use Google Sheet’s “GOOGLEFINANCE” function to keep track of stock metrics, such as P/E ratio and EPS. Then, I apply Peter Lynch’s formula for fair value to determine if a stock is underpriced or overpriced. I only use the fair value formula to time my orders. After that, I usually hold the stocks for the long term.

Jonathan Merry, Founder, Moneyzine

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