Investors often ask us whether they really, truly need to seek investment guidance from a wealth advisor. After all, with all of the opinion columns, call-in programs and "expert" blogs out there, it's not as if there's a dearth of free financial advice out there.
As it turns out, that's actually part of the problem – but more on that later. When it comes to choosing the right wealth management strategies for your unique circumstances, there's simply no substitute for the experience and expertise that wealth advisors offer.
Why? Because investors face a number of constraints and dilemmas, all of which limit the most crucial element in successful investing: Efficiency.
The 4 Problems With DIY Strategic Financial Planning
1 - Not Enough Hours in the Day
Feeling frustrated about a shortage of time? You’re not alone – “there’s not enough hours in the day” is a common complaint. In the short run, those countless demands on your time may serve as a annoyance, but in the long run, it’s all about the limited – and ever-decreasing – amount of time that’s left between now and your retirement date.
If everyone had 100 years to accumulate funds for 30 years of retirement, efficiency wouldn’t matter. In reality, time is limited and efficiency is key.
2 - Information "Overload" Age
We may be living in the Information Age, but it should be re-named the Information Overload Age. The sheer amount of available data actually limits our ability to both comprehend it all and to utilize it efficiently.
Deciding which information is credible, valuable and relevant is difficult enough; the problem of overabundance is aggravated by the fact that much of that info is contradictory, inconsistent, self-serving, or all-of-the-above.
The constant babble spewing from Wall Street, the financial media and many investment professionals emits far more noise than actual information – and for many investors, separating the signal from the static is impossible. While information is cheap, wisdom and insight are priceless – and wealth advisors can bring the difference between useful and useless into focus.
3 - What Is the Plan This Week?
Investing boils down to making choices, but few investors actually have a coherent system in place to manage those choices, let alone a method to distinguish what works and what doesn’t. This leads to errors, inconsistency and stress – not to mention all the valuable time that’s wasted following unsuccessful pursuits down blind alleys.
4 - Investing 101 - Back To Basics
Not surprisingly, most investors haven’t ever been provided with a basic understanding of how securities markets work, or even investment basics such as risk or the importance of diversification. Ultimately, knowledge of these fundamentals serves as the best defense against the misleading, counterproductive hype emanating from Wall Street and the media.
Wealth advisors know that overcoming these dilemmas leads to efficiency. But efficiency doesn’t come naturally – if it did, there’d be no need for golf, tennis and ski instructors, not to mention economists.
The Investment Management Solution Is The Path Of Efficient Investing
When it comes to being successful at something, efficiency plays a vital role. As you improve at an endeavor – whether that’s tennis, skiing, golfing or investing – you waste less effort. Case in point: a skillful golfer hits the ball farther and straighter than an unskilled golfer while expending less effort. Inevitably, skill and knowledge lead to increased efficiency.
By now, you’ve probably gotten the point: Efficiency is crucial. Making the right choices for the right reasons and achieving financial peace of mind are both exercises in the pursuit of efficiency -- and the right investment guidance can help you get there.
Efficient investing reflects the relationship between input and output, between costs and benefits. Efficient solutions move you farthest along your intended path, accomplishing your objectives at the lowest cost.
If retirement is your primary investment objective, the rate of growth you achieve on your instruments will profoundly impact your peace of mind and comfort during retirement, as well as the amount of stress you feel – or don’t – during your accumulation years. Increasing your skill, knowledge and efficiency as an investor is an endeavor with a high rate of return.
In the case of investment, efficiency leads to:
- Higher and more dependable rates of return
- Reduced risk exposure
- Liberated time
- Simplified financial affairs
- Reduced frustration
- Greater confidence when making investment decisions
Efficiency in investing also assumes that investing is not your hobby – and that you would prefer to spend no more time than is necessary managing your finances. That’s where investment professionals come in handy. Take advantage of your wealth advisor’s knowledge and expertise to make your investments more efficiently.