Should You Hire a Financial Advisor or Go It Alone?

When it comes to managing your money and making life’s big financial decisions, you might be wondering: Should you hire a financial advisor, or is it better to handle things on your own?

A lot of people think they’ve got everything covered. The market’s been strong, their 401(k) is growing, and with so many investing apps available, it feels like managing money has never been easier. But here’s the reality—making money in a bull market is easy. It’s during the downturns, the unexpected moments, when the real challenges pop up. And more often than not, it’s the subtle things you’re not even thinking about that end up making the biggest difference down the road.

I meet with people every week, and it’s common for me to find little things that have been completely overlooked. These might seem minor now, but over 10, 20 years? They can make a massive difference to your financial future. You might not realize how much it’s costing you to not have a solid plan in place—whether it’s about how much you’re saving, what your asset allocation looks like, or even the kinds of opportunities you didn’t know were right in front of you.

The Power of Professional Advice

When you work with a professional, you’re not just paying for their advice—you’re gaining access to strategies and insights that take years to develop. The kinds of things that can set you up for long-term success and help minimize tax liabilities in retirement.

A great example of this came up recently when I spoke with someone who thought they had everything handled. They mentioned they were working with a big-name financial firm. So, I asked them, “Isn’t that firm also a big insurance company?” They said yes. Then I asked, “Are you working with a fiduciary or a broker?” They didn’t know. And when I asked if they had annuities or whole life insurance, they immediately said yes.

It turns out, they’d been sold these high-commission products without fully understanding what they were buying or how much they cost in the long run. And they weren’t aware of the difference between a fiduciary, who is legally required to act in their best interest, and a broker, who only needs to meet the “suitability” standard, which is much lower.

That distinction matters. Over time, these kinds of decisions can add up to significant financial consequences—especially when you’re dealing with products that may not align with your goals or long-term interests.

Why It’s Easy to Miss What You Don’t Know

A lot of folks feel confident because they’ve been managing things on their own, using the tools available. Maybe you’ve got an app or two, a growing portfolio, and things look good for now. But what I see all too often is that people don’t realize what they don’t know.

For instance, how many people have access to RSUs (restricted stock units) or an employee stock purchase plan (ESPP) and don’t fully understand how to take advantage of it? I can’t tell you how often I’ve asked people simple questions about their retirement plan or stock options, and they had no idea what was even available to them. It’s not their fault—their company representative never explained it, and they didn’t know the right questions to ask.

That’s where professional guidance can make all the difference. It’s about seeing the bigger picture and ensuring you’re not leaving money on the table.

The Fiduciary Difference

One thing to be aware of is that not all financial advisors are the same. A fiduciary advisor is legally obligated to act in your best interest, which means they have to recommend the best options for your specific situation. A broker, on the other hand, only has to offer products that are “suitable,” even if there are better options available. It’s an important distinction, and understanding the difference can save you from potential conflicts of interest.

When you work with someone who’s incentivized to sell you a product that benefits them more than it benefits you, it can have long-term consequences. And in the world of finance, those consequences often compound. It’s important to make sure that your advisor’s interests are fully aligned with yours.

Emotional Decision-Making vs. Objective Guidance

Emotions and money don’t always mix well. When things get tough, it’s natural to panic or make decisions based on fear. Or maybe you’ve been riding the wave of a strong market, feeling confident, only to find out later that you were overly optimistic about your investments. It happens to all of us.

The benefit of having a professional in your corner is that they bring objectivity. They’re not emotionally tied to your money, which means they can help you stay focused on the long-term plan and avoid knee-jerk reactions that can derail your progress. It’s all about making decisions based on logic and what serves your future, not just reacting to whatever’s happening in the moment.

Avoiding Complacency

There’s a funny thing that happens when everything’s going well: we get comfortable. You might have a great job, a nice home, maybe some solid investments. You haven’t experienced any major setbacks, so it’s easy to think you’re all set. But complacency can be risky.

It’s easy to feel like there’s no need to make any changes until something goes wrong. But being proactive—making sure your plan is airtight before you hit a rough patch—is what really makes the difference in the long run.

The Bottom Line: It’s About Being Prepared

Whether you decide to hire a financial advisor or handle things on your own, the key takeaway here is simple: don’t wait for a crisis to get your financial house in order. The sooner you start paying attention to the details, the better prepared you’ll be for whatever life throws your way.

Ready to Take the Next Step?

If you’re curious about where you stand and what opportunities you might be missing, I offer a complimentary, no-obligation wealth strategy call. We’ll go over your current strategy and, as part of the process, I’ll provide you with a free one-page financial plan that can give you some real clarity on your next steps.

Book you call today! https://calendly.com/bfawealth/new-strategy-call?month=2024-10

About Mateo Dellovo: I’m the founder of BFA Wealth, where we focus on helping clients make smart financial decisions for the long term. Our goal is simple: provide clear, personalized guidance that aligns with your goals, without the sales pitches or unnecessary complexity.

Disclaimer: BFA Wealth does not provide tax or legal advice. All investments involve risk, including the loss of principal. Please consult with your tax advisor or attorney regarding your specific situation.