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Why Do-It-Yourselfers Should Consider Hiring a Financial Planner

Planning for the future when it comes to your finances is crucial. It also enables you to take care of yourself after retirement. A lot of people choose to take on financial planning themselves and forego a financial planner. While it isn’t terribly difficult to learn how to manage investments, there are many risks involved if you don’t understand what you’re getting into. The world of finance has frequently changing dynamics and can be difficult to manage over time.


With a financial planner you trust, a lot of the guesswork and heavy lifting goes directly to them. This allows for a less stressful experience when managing money and can be lucrative over time. Understanding the drawbacks to DIY and the full scope of how financial planners work can help prepare for retirement.


The Pitfalls of DIY


According to Forbes, more and more people are managing their own money because of easy access to financial information, online brokers, and low fee market index funds. While there are many pros and cons of being your own financial planner, there are a few things to consider.


It’s difficult to constantly monitor finances- without the help of a planner, you may not be ready when the market fluctuates. It is time-consuming to keep track of how the market changes. As a DIY’er, you’re taking on learning everything for one portfolio whereas planners are managing many portfolios. It’s possible that your finances will perform well, but without careful consideration and monitoring you could be vulnerable to hidden fees and miss out on tax savings.


You may make expensive mistakes- financial planners are trained professionals with experience managing financial portfolios. Essentially, because they work in this field every day, they are experts in managing money and make informed decisions. Without constant monitoring or the proper training, you might miss out on great opportunities to save or grow your wealth.


Managing money can be emotional- especially if it’s your own. Emotions can lead to dangerous financial decisions or risky impulse buys. Working with a planner who has your best interest at heart is a great idea. They can help you plan towards retirement and large purchases without the risk of making emotional financial decisions. It’s easy to make knee-jerk, unchangeable decisions with money if you don’t have an advisor.


It’s hard to make good financial decisions during tough times- and financial planners know this. Whether you’re entering retirement, dealing with the death of a family member or facing major medical bills, your advisor can help you make educated decisions regarding your finances and guide you during tough times.


Financial Planner vs. Investment Manager


If you’re leaning towards working with a financial advisor and start the process of searching, you might run across the term investment manager. These two roles are not necessarily one and the same. A financial planner may offer investment management, but an investment manager doesn’t really delve into the bigger picture items of tax planning, risk management, cash flow planning, estate planning, and other things. A good financial planner focuses on all of these areas on top of investment management.


Financial planners bring peace of mind when it comes to handling your financial portfolio, especially when planning for retirement. They build relationships with their clients, so they understand their particular situations. This way they can make changes that are best suited for their clients while monitoring the markets closely. Understanding the difference between financial planners and investment managers is a great way to determine where your needs lie and what path is best for you.


Planning Before Becoming a Widow or Widower


When you’re young and just entering the job market retirement feels like something you don’t need to worry about. It’s much easier to manage your money yourself when you first start out. As the realities of adulthood start to appear, managing your financial portfolio becomes more difficult. Planning for your forever home, putting away a college education fund for your kids, and prepping for retirement can suddenly seem daunting without the proper groundwork.


No one wants to think about the death of a family member, especially a spouse, but it’s important to plan ahead. Having a clear plan in place financially can help take away one more headache during a difficult time. It’s natural for one partner to take the lead role in a marriage with overseeing finances. When one partner passes away, it can be a confusing situation for the surviving spouse to handle.


At Pathway Financial we recently worked with a woman who lost her husband 10 years before she came to us. He had been in charge of their nest egg throughout their whole marriage. She was looking for advice on how to manage her finances moving forward since she was feeling a little lost trying to understand this newfound financial world. They had worked with financial advisors throughout the years, but her husband had been the main contact and they had lost touch with their advisor years before her husband’s death. There was no plan in place for her to manage her finances alone and we worked alongside her to find the best plan we could. This could have been avoided if there had been a plan in place before he passed away.


Who Can You Rely On?


Losing a spouse is an extremely emotional and trying time no matter when it happens or what your financial means are at the time. Unfortunately, this can also be a very financially stressful time in a person’s life. There are changes to social security benefits, possible changes to pension benefits, and eventual tax filing status changes that could significantly impact tax burden. Another factor to consider is the ongoing oversight and management of any retirement nest egg.


Unfortunately, the biggest risk your surviving spouse might face is getting bad advice or getting taken advantage of. Elder financial abuse is increasingly becoming a massive problem. Figuring out who you can rely on early on and planning for the future can make a world of difference.


We believe it is extremely important for any financial plan to address the inevitable day when a spouse passes away. If you are a DIY’er it’s important to consider if your spouse survives you, who can they rely on for sound, unbiased financial advice that has their best interest always in mind. Weighing the pros and cons of managing the planning yourself and working with a planner is an important step to a solid financial portfolio.


Contact

Connersville Office

126 W. 6th Street

Connersville, IN 47331

Telephone: 765-698-5121

West Chester Office

9078 Union Centre Blvd. #350

West Chester Township, OH 45069

​​Telephone: 513-785-0686

Fax: 765-825-4191

​Email: info@pathwayplanners.com

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Benjamin Harvey is an investment adviser representative, and Evan Barnes is a registered non-solicitor of, and securities and advisory services are offered through, USA Financial Securities Corp., Member FINRA/SIPC. www.finra.org A Registered Investment Adviser located at 6020 E. Fulton St., Ada, MI 49301. Pathway Financial Planning, Inc. is not affiliated with USA Financial Securities.

Ben Harvey is authorized to transact securities related business and investment advisory services only in states where he is properly registered. For investment products and services these states include: IN, OH. For investment advisory services these states include: IN, MT, OH. Additionally, clients who are not residents of these states cannot be serviced. This website is not intended to provide investment, legal, or tax advice, nor to effect securities transactions or to render personal advice for compensation.