DIY Investing or Hire an Investment Pro?

Help?Many women assume that they must have a hefty bank account before a professional investment advisor will even look in their direction. Others worry about big fees and commissions cutting into the investment portfolio the advisor was hired to grow.

So, is it financially smarter to hire an investment manager or read up on investing and handle your money on your own? The answer depends on you!

How Do You Want to Get Financially Fit

You know those crazy people who naturally spring up from bed at 6 AM in the morning, lace up their running shoes, and greet the rising sun as they put in their daily six miles? You’re either nodding along because you are one of those people or rolling your eyes, because you can’t fathom dragging yourself out of bed a minute sooner than you absolute have to.

Some people love running in the morning, hitting the gym after work each night, or making it to the yoga studio four times a week like clockwork. Others of us need the help of a personal trainer who can hold us accountable for showing up, push us to work harder than we would on our own, and help us design exercise programs that allow us reach our fitness goals.

Professional investing is the same way. Some women love the idea of educating themselves, learning their tolerance risk, and opening up their own mutual funds or brokerage accounts. The internet is teeming with amazing resources, and women with simple investment needs may want to invest in a mutual fund that tracks one of the major indexes, like the NASDAQ or S&P 500. Often, these low-cost mutual funds outperform professionally managed mutual funds.

Other women, however, may not have the time, interest, or confidence to invest on their own. They may not be able to spend hours researching mutual funds, or they may have more complicated needs that require multiple financial solutions.

For these women, a financial planner is probably a good bet. A professional can help women define their financial goals, clarify their income and assets, and then design an investment plan to help grow those assets. A professional investment advisor may also recommend insurance products and make referrals to tax advisors or additional assistance.

Fee vs. Commission

If you decide that an investment advisor is right for you, you’ll need to decide what type of payment structure you feel most comfortable with. The two main forms of payment are commissioned financial advisors and fee-only financial advisors who charge an hourly rate or a percentage based on the assets they manage. Certain advisors may combine fees and commissions. There is no right or wrong answer, but some industry professional cast skepticism on financial advisors who earn a commission on the investments their clients buy. This may lead to a conflict of interest for the unscrupulous advisor.

Almost all advisors offer free consultations, so you may want to sit down with a couple just to see what they have to offer before deciding if you want to try investing on your own.

Even if you do decide to work with an advisor, it is always a good idea to be financially literate so you understand what your advisor is doing on your behalf. Take time to review all the great investment information for women we offer on WIFE.org.

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