The Disadvantages of DIY Financial Planning

Picture of Annrose Isaac CPA, CFP®, MBA
Annrose Isaac CPA, CFP®, MBA

Avoid Challenges and Maximize Opportunities by Using a Professional Planner

If you’re someone who takes pride in making your own way in the world, you’re likely wired to feel inspired by the idea of DIY financial planning. It might feel practical to you, or even like the thing you “should” do – crafting your own unique strategy in pursuit of your money goals. However, DIY financial planning may not allow you to take full advantage of the tools available to you – meaning you could also be missing out on another level of financial security and peace of mind.

As you consider your financial plan, be aware of the challenges below that come with choosing to go it alone rather than working with a professional financial advisor.

You May Be Missing Several Tools in Your Toolbox

Financial professionals have many tools at their disposal, including software and information that are not readily available to the average consumer. It’s true that there are trading platforms that offer investment advising help, but many low-cost investment platforms lack the options that could best serve your needs. A Registered Investment Advisor (RIA), on the other hand, can utilize the entirety of the investment universe to build you a portfolio – oftentimes with more favorable expense ratios and limited transaction costs, too.

DIY Financial Planning Can Be Expensive

Many people labor under the mistaken belief that DIY financial planning will save them money. This could be true in some cases but, while you do have to pay for professional financial services, chances are you’ll be paying less by hiring a professional than you would be spending on the tools you need to properly plan your finances. Generally, the required software packages for financial planning, analytics, trading, and charting will end up costing you around $1,000 a month – and that’s not factoring in transaction and account fees. Since you’ll likely also be learning as you go, it will be easy to make mistakes or miss opportunities that negatively impact your bottom line.

SEE ALSO: Why You Should Work with a Financial Advisor After the Death of Your Spouse

Your Time is Limited

If you have a DIY spirit, you’ve probably spent countless hours doing things like assembling IKEA furniture or fixing a leaking kitchen pipe on your own. While there’s a definite sense of satisfaction when you accomplish something like this, you probably also recognize that an expert could do the work much more quickly.

When it comes to your finances, a professional financial advisor won’t be looking at the directions or working through first-time frustrations. They will know what to look for when it comes to retirement planning tools, portfolio rebalancing, or stock positions, giving them the time needed to take advantage of any opportunities in the markets. If you’re unsure of what to look for, you may waste time learning what to do rather than being able to take action on moving closer to your goals.

Additionally, the markets are most active during the standard workday when you’re most likely at your busiest. If you’re unavailable during times like this, you could find yourself exposed when you don’t want to be.

SEE ALSO: What You Should Know About Certified Financial Planners

You Don’t Know What You Don’t Know

If you’ve been practicing DIY financial planning, you may feel as though you’ve learned a lot through the endeavor – and you probably have! You could very well be ahead of the curve when it comes to personal finance knowledge. However, financial advisors go through years of formal education and on-the-job training to master the products and the processes used in the industry.

Educated as you may be, you simply don’t know what you don’t know. A financial advisor can offer the extensive knowledge and experience you need to successfully navigate your finances now and into the future. The financial industry has dozens of advanced degrees, certifications, and licensures for a reason – it’s a complicated industry with incredibly high stakes. Having an advisor in your corner who can help you navigate the complex landscape of financial planning can help you avoid any missteps that will put you behind the eight ball.

There’s Little Room for Error When it Comes to Your Financial Future

Even if you can overcome the practical and mental hurdles above, mistakes with your financial plan can be costly. Learning through trial and error can lead to years of time and money lost. If you’re early in your investing and working journey, you may be able to afford taking on that kind of risk. The closer you get to retirement, however, the more precarious your positioning becomes if you’re not relying on the guidance of a financial advisor with your best interests in mind.

Would You Like a Partner in Your Financial Future?

It’s likely that your DIY spirit has taken you far in life, and it may even be largely responsible for the success you’ve enjoyed thus far. However, in some things, partnering with a professional you can trust may be the wiser and safer choice. Financial planning is one of those things. Having a financial advisor at your side through all phases of your financial journey can give you the peace of mind that DIY financial planning simply can’t provide – while often saving you time and money in the long run, too.

At Wade, we know you’ve worked hard to build your wealth. As fee-only planners and fiduciaries, we receive no commissions or referral fees for any of the solutions we recommend. This means you can rely on our advice to be unbiased and focused solely on our client’s best interests. If you’d like to learn more about partnering with us on your financial journey, please schedule a discovery call today.

This communication contains the opinions of Wade Financial Advisory, Inc. about the securities, investments and/or economic subjects discussed as of the date set forth herein. This communication is intended for information purposes only and does not recommend or solicit the purchase or sale of specific securities or investment services. Readers should not infer or assume that any securities, sectors or markets described were or will be profitable or are appropriate to meet the objectives, situation or needs of a particular individual or family, as the implementation of any financial strategy should only be made after consultation with your attorney, tax advisor and investment advisor. All material presented is compiled from sources believed to be reliable, but accuracy or completeness cannot be guaranteed. PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. INVESTMENTS BEAR RISK INCLUDING THE POSSIBLE LOSS OF INVESTED PRINCIPAL.

Wade Financial Advisory, Inc. is an investment adviser registered with the Securities and Exchange Commission. Registration of an Investment Advisor does not imply any level of skill or training. A copy of current Form ADV Part 2A is available upon request or at Please contact Wade Financial Advisory, Inc. at (408) 369-7399 with any questions.

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