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Gladys Tan

Financial Consultant

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Which Is Better: Learning How to Invest Myself (DIY) or Hiring a Financial Advisor to Help Me?

Updated: Mar 29, 2023

As a financial consultant, Decembers are probably one of my busiest periods.

My calendar is usually filled with back-to-back appointments with existing clients and new faces that are all eager to ensure the next year will start with good financial know-how and by making calculated financial decisions for growth.

While I'm aware of my existing client's needs, I often get one very popular question when I meet new or prospective customers. And this question is:

Should I invest by myself (DIY) or hire a financial advisor?

You would think the obvious answer is to hire a financial advisor.

But this isn't always the case.

First and foremost, I do not believe the above are mutually exclusive. Both can happen at the same time, as long as they are delivering value to you.

But if you are contemplating between the two, please read on.

Whether you do it yourself or choose an expert for financial advice, you are choosing an advisor.

The question is: Which is the best investment advisor for you?

Here are some pointers which I hope can help you understand your options better.

Potential pros of DIY investing:

1. Costs are presumably lower If you know how to: (a) source for the right investment products (b) have the products cheaply delivered to you (done-for-you).

2. Independence and control: DIY investors get to make their own investment choices on their own terms, based on their own values and goals, and in their own comfort zone.

Potential cons of DIY investing:

1. Lack of expertise and professional advice: In comparison with professionals, DIY investors often lack the expertise and may fall short of the required skills in multiple instances. These can cost DIY investors more money over the long run.

2. Time consuming: DIY investors typically find themselves spending at least a few hours a day understanding and researching the market to give themselves any chance of success. This is on top of their day job and personal commitments.

Potential pros of hiring an advisor:

1. An investment plan is easy; a financial plan is not. An advisor can craft an overall financial plan which includes retirement planning, asset allocation, estate planning, tax planning, educational planning, and insurance planning.

2. Suitability of financial products in your financial portfolio. With a deep understanding of your needs, risk preferences and appetite, an advisor can recommend suitable financial solutions to you.

Potential cons of hiring an advisor:

1. Concern that the advisor doesn’t always have your best interests in mind. Conflicts of interest can arise. You can avoid many of these problems by asking your potential financial adviser to recommend options so you have a better understanding of what’s in it for you.

2. Costs. Financial advisors cost money and not all charge you in the same way. Before choosing a financial advisor, you need to determine whether the cost is worth the service rendered. It's also worth noting that for some, the cost of doing nothing can be much more expensive in the long run.

Price is what we pay, value is what we get.

Find out what is important to you and what cost are you willing to pay for it?

Feel free to chat with me if you still need some help deciding which option is better for you.

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