Are you a do-it-yourself investor?

If you are a Do-It-Yourself Investor

We frequently work with engineers, contractors, teachers and many other bright minds who prefer to manage their own portfolios because they are so fee-conscious. They love details and spreadsheets. If this sounds like you, chances are you fall into the DIY (Do-It-Yourself) investor category. You make your own investment decisions and save money in the process. You keep an eye on returns to make sure that your portfolio stays competitive with the market. It’s easy to believe that no one will look out for you and your wealth like you.

You’ve worked hard to accumulate your savings, and we respect that. We believe you deserve better than the one-size-fits-all retail solutions available to the general public. When you’re young and time is on your side, there’s nothing wrong with those retail solutions. Hiring a financial advisor is not as critical in the accumulation phase with your 401(k) plan. But as you get older and move closer to retirement, the challenges involved in going it on your own are only going to increase.

Comprehensive Wealth Management means combining all aspects of your current financial position and future goals into one manageable, controllable picture. Consider:

  • How will you generate sufficient income from your retirement savings?
  • How will you ensure that you don’t run out of money in retirement?
  • What are the best strategies for diversifying your portfolio?
  • How do you avoid excessive stock market risk?
  • What’s the most effective and tax-efficient way to pass on your wealth to your heirs?
  • Who will take care of your spouse when you’re gone?
  • While you sit in cash trying to mitigate risk, other inverse options or fixed income assets could be making returns during periods of market volatility.
  • More than 70 percent of all actively managed U.S. equity mutual funds trailed their benchmarks for the five years ending 2008.
  • The retail options you’re familiar with exclude institutional money managers, who offer sophisticated strategies.

If you’ve managed your investments yourself, you may not be aware of how markets have changed. Today, the algorithmic high-frequency trading that dominates markets means that they can plunge in nanoseconds due to forces outside your experience. Before you’ve had a minute to digest the news, the market’s fallen by 5 percent and it’s too late to do anything about it. The ups and downs of investing in a volatile market environment are rarely matched to the needs of most investors. This volatility leads to emotional reactions, which can drive bad decisions. For instance, the euphoria that can occur at the top of market cycles can lead to manic buying as things go downhill. In the same way, the dejection that occurs at the bottom of these same market cycles tends to lead to selling too low. That’s where the objective perspective of an advisor can facilitate a more disciplined, less emotional investment management approach.

What type of advisor is best for you?

Deciphering the “What’s What” and “Who’s Who” in today’s complex financial services industry can be difficult, even for the most financially sophisticated members of the general investing public. There are so many designations for financial and investment professionals that it’s hard to discriminate who within that alphabet soup is best positioned to offer the type of professional advice you deserve. 

Understanding the difference between the fiduciary and suitability standards may also help you appreciate what levels of care you will receive from different types of financial advisors. Although the distinction between the Fiduciary and suitability methods of offering advice is rarely discussed by “broker-led” large financial companies, we feel it is essential for investors to know the difference. 

Fiduciary financial advisors are required to always act in your best interest. In contrast, advisors that operate under the suitability standard are merely required to recommend investments that are suitable for you. At this stage in life, you may find that partnering with a Fiduciary wealth manager who understands markets and retirement income planning and is legally bound to act in your best interest could provide a significant value-add.

Protecting your portfolio from market downturns

Our proactive approach works not only to grow your wealth, but also defends against the devastating impact large drawdowns can have on the long-term growth of your investment portfolio. We offer a dynamic approach to wealth management designed to minimize your losses in down markets and maximize your gains in up markets. 

You can’t afford to maintain a static portfolio that acts as a punching bag for today’s volatile markets. We understand that financial planning is never a one-size-fits-all task. We practice a risk on, risk off approach through our unique and sophisticated strategy diversification process.  

7 reasons to hire a fiduciary financial advisor

Through the work we’ve done with other DIY-inclined investors, we’ve compiled this list of seven primary reasons to hire a Fiduciary financial advisor versus going it on your own. Some may surprise you.

  1. Access to sophisticated approaches: We facilitate strategies and investments through our access to CFAs trained and licensed for the most sophisticated levels of investment management strategy. These investment analysts, who work at large brand-name firms and boutique money management firms, can help you diversify your portfolio in ways that offer strategies potentially provide a more comfortable ride in the markets.
  2. Accountability for saving and investing plans: Think of an expert advisor like a personal trainer for your finances. You gain accountability for your savings and investing plans and consistent reinforcement of your goals and dreams.  It’s about funding and aligning your investment pyramid with your lifestyle pyramid.  All too often, we can be our own worst enemy. The best person to help you stay on course is a true accountability partner. Time to get fiscally fit!
  3. Coordinating estate, tax and investment planningA major problem for DIY investors is the potential for money to fall through the cracks and issues to remain unaddressed due to a lack of coordination between estate, tax and investment planning. Think about this like working with a team of doctors who diagnose and treat serious illnesses. If the doctors aren’t on the same page with each other, your wealth may suffer. In the absence of a financial quarterback calling the right plays, you’re bound to fumble, potentially losing out on the retirement you’ve dreamed about.
  4. Managing generational wealth transfers: When wealth passes from Mom and Dad to you and your siblings, it’s not uncommon for costly tax mistakes to occur. A specialized wealth advisor is the best-qualified professional to navigate through the choices that need to be made when an inheritance passes from one generation to the next. The value of a financial plan laid out by your parents and a trusted advisor truly shines during generational wealth transfers. 
  5. The gift of timeAs life goes on, very few people want to trade time with family, friends, and their passions to stare at a computer screen, picking mutual funds, rebalancing their portfolios, and managing their investments. Hiring an advisor, like forming a relationship with your GP and other doctors, will save you time and money in the long run. The right wealth manager will ensure that your investments and finances align with your goals so that you head in the right direction and are freed to focus on the really important stuff in your life. 
  6. Improved cash flow: Accumulating money for retirement on the one hand, and using those savings to generate income in retirement on the other, require vastly different skill sets. While it may not take an investing genius to save and invest money for retirement, it does require an experienced retirement advisor to help you create a retirement income plan that you won’t outlive. 
  7. Caring for your spouseFrom our experience, one spouse manages the investments and finances in most marriages. One of the most difficult situations for the surviving spouse is shouldering unfamiliar responsibilities during a time of grief. We also find most people do not realize the potential tax changes that occur with filing as a single-filer now. The right wealth advisor can ensure that your spouse is in good hands and cared for financially should you pass away first.

Our Proprietary Refining Wealth Process helps you discover key areas of your income, tax, investment, or estate planning that need improvement, then offers a clear,  strategy for getting everything on the right track.

Are you ready to book a 15-minute strategy session via phone, virtual, or in-office?

Get answers to your questions, plus ideas on how to better protect your retirement. Learn which strategies are working for others in your situation.

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