Finding a Financial Advisor to Manage Your Assets or DIY?

You may be accumulating assets or preserving assets if you are already retired. Either way you have to make a number of critical financial decisions that impact when you retire, your standard of living during retirement, and your financial security late in life when you need it the most.  Is finding a financial advisor to depend on to help you make the right financial decisions the route to take or could you do it yourself?

Three Processes

There are three distinct financial processes that impact your ability to accumulate and preserve assets for retirement. You have to decide who does the work for each process.

  • Financial planning produces your roadmap for savings rates, budgets, insurance, tax, retirement, estate, and other financial criteria
  • The investment advisory process allocates assets, selects money managers, and produces performance analytics
  • The money management process selects securities for investment and makes buy/sell decisions. For example, mutual funds, hedge funds, and ETFs are money managers 

Financial Planner

Who is going to produce your financial plan? Is it you or a planning professional? Very few investors have all of the requisite knowledge due to the many facets of the planning process.

There are two types of planning service providers. There is the Personal Financial Planner who meets with you face-to-face. This service is more expensive, but the best professional provides a plan that is tailored to your needs.

You also have the Online Financial Planner who is accessible by telephone and email. Some online planners are also using Live Chat to communicate with clients. is an example of an online planner that delivers low cost, standardized plans to consumers with relatively simple financial situations.

You may also find there are Personal Financial Planners who provide tailored solutions for more complex requirements, but limit their communications to telephone, email, and video.

Financial Advisor

You may decide to act as your own financial advisor if you have the time and necessary expertise. You make the asset allocation decisions, for example how much is invested in the stock market and the bond market. You select the money managers who invest in the securities markets. Most investors, who act as their own advisors, send their assets to a mutual fund family like Vanguard or Fidelity.

The traditional financial advisor is a professional who provides tailored solutions and meets with clients face-to-face. The advisor may also provide planning services so your financial plan and your investment plan are integrated. Many advisors also provide insurance and tax services themselves or through affiliated professionals.

You can also select an Online Financial Advisor, also known as a Robo Advisor (Betterment, Wealthfront, SigFig), because there is little or no human contact. They have automated the advisory process. You select a model portfolio that is based on your performance expectations and your tolerance for risk. The firms’ algorithms do the rest: Allocate your assets, invest in ETFs, rebalance, harvest tax losses, and produce performance reports. A principal benefit of this type of advisor is lower service fees.

Money Manager

This is the most complex role because you are selecting securities for investment. You have to research the securities, make the buy decisions, monitor the performance of securities, and make the sell decisions. You may invest in stocks, bonds, ETFs, mutual funds, hedge funds, index funds, or other types of investments.

When you act as the money manager you are 100% accountable for the performance of your assets. This is true even if you invest in mutual funds. You still have to select the right funds.

Your Decision

Most consumers decide they do not have the time to do the work or the expertise to make the right decisions. Consequently they rely on finding a financial advisor, one or more, for the three financial functions: Planning, Advisory, and Money Management.

Jack Waymire worked in the financial services industry for 28 years before he left to found the Paladin Registry ( in 2004. This investor education website was based on the Principles in Jack’s first book: “Who’s Watching Your Money? The 17 Paladin Principles for Selecting a Financial Advisor.” 
The Registry also has a free service that matches investors to advisors who meet Paladin’s minimum requirements for competence and trustworthiness.

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