Why You Should Invest in a Financial Advisor

Are you starting to feel under the weather? Search your symptoms on WebMD. Need to talk through an emotional issue with a licensed professional? You can now text an online therapist. Have a few extra dollars and need help investing in the markets? Hire a “robo advisor”. Thanks to the evolution of technology, advice is more accessible than ever. With many inexpensive options for investing, why should you invest in a traditional financial advisor?

The role of a financial advisor has progressed tremendously over the last 50 years. Advisors used to specialize in one aspect of your financial life. Your financial advisor could’ve been your stockbroker who assisted in managing your investment portfolio, or they could’ve been an insurance agent who you bought life insurance from. Today, you can hire a CERTIFIED FINANCIAL PLANNER™ who will provide you comprehensive financial planning.

While investment management is part of your overall financial picture, it is only one component. Advisors now provide additional value by acting as an ally to clients during major life decisions that may create financial stress. Barron’s reports that the industry average cost for financial advice is 1% of assets under management. By working to control behavioral tendencies of the average investor and coaching clients through pivotal times, advisors as a whole can be worth the fees. According to a study done by Vanguard, advisors who follow best practices in wealth management can add an additional 3% in net returns over the long term, with half of that coming from behavioral coaching.

Investing is an emotional activity. Whether derived from fear, greed, or past experiences with finances, most investors have an emotional tie to money. Financial experts can work with you to keep these emotions at bay, while staying focused on your goals and identifying hidden risks along the way. A good financial advisor will provide a roadmap for your financial goals and keep you motivated to achieve them.