I get this question pretty regularly: “Why would I need an advisor”? Sometimes I even get the assertion: “I don’t need a financial advisor. I’ve been doing it myself for 35 years (or 5, or 10, or 20).”
It may very well be true that you don’t need an advisor. Some people have the knowledge and intestinal fortitude to take the DIY approach.
But if you’re open to professional help, here is one woman’s perspective on why she finally decided to hire her own advisor. Her name is Wendy Cook, and she originally wrote her article in August of 2016. This is why she decided to get help:
- Biases in thinking: as Kahneman and Tversky ingeniously demonstrated, we all have biases in our thinking that we just can’t help. They lead us to illogical and even damaging conclusions even when we’re aware of them! We need an independent third party to help us overcome those biases if we want to reach our goals.
- Education: the available information about investing and planning is overwhelming and growing all the time. We all need a second opinion on what we glean from the news, whether it’s related to investing, estate planning, college savings, insurance, or some other topic.
- Loved ones: if anything happens to me, my husband/wife/partner/children/loved ones have one person to call to get help.
- Time: we just don’t have time to give our planning the attention it deserves, or we prefer to outsource our planning to make time for the activities we enjoy more.
I would add one more: we just don’t know what we don’t know. It’s difficult and time consuming to become an expert in all the areas covered by a true financial life plan; that’s why it’s a profession. Even a small gap in knowledge can have a huge impact on our success, so two heads are always better than one. Mistakes can cost us, but so can missed opportunities.