Personal Finance for Do-It-Yourselfers

Why Should I Partner with an Advisor Instead of Doing It Myself?

If you’re like me, you understand that there’s nothing quite like the satisfaction earned from a D.I.Y. project done right. Being able to tackle a job yourself and save a few bucks in the process is incredibly gratifying. Unfortunately, many investors find out that building a financial plan and investing for long-term success can be a very difficult solo undertaking. Even if you may have the ability to be a successful individual investor, there are a number of reasons why it is a prudent decision to work with an investment advisor.

This is because planning for your financial goals is unlike any other D.I.Y. project. There is no owner’s manual or one-size-fits-all set of instructions. Every individual has a unique financial situation and set of goals, and the steps toward success need to be custom-built. In addition, investing is not a “set it and forget it” endeavor. There is no final step to complete; an effective financial plan and investment portfolio both require ongoing care and maintenance.

Personal Finance for DIYers

This brings us to the first area in which an investment advisor can add value:

Ongoing Financial Planning and Investment Review

Even if an individual has the technical know-how, motivation and time to be a successful investor, self-evaluation is extremely difficult. He or she will need to address questions like:

  • Am I saving enough to meet my financial goals?
  • Do I need to downsize my home?
  • When should I begin taking social security?
  • Am I saving in the right “buckets”?
  • Am I taking an appropriate amount of risk in my investment portfolio?
  • When can I comfortably retire?

These are all very difficult questions to answer without the help of a professional who has access to financial planning tools and expertise in dealing with these topics. In addition, sound investment review can be a daunting task for an individual who does not have access to institutional software tools and resources. Hiring the right investment advisor can help you feel confident that a dedicated team of professionals is working constantly to provide due diligence on your investments and track your portfolio’s performance using industry-leading tools that are unavailable to individual investors. Your investment advisor’s back office team also works hard to make sure you are receiving the best possible execution on any trades in your account, as well as functioning as a safety net in fraud prevention.

Low Cost Investments

Another benefit of working with an advisor is that he or she may be able to provide access to lower-cost investments and funds not available to individual investors directly. Clients of Hewins Financial Advisors, for example, have access to the mutual funds offered by Dimensional Fund Advisors (Dimensional), which they would not be able to purchase directly. Dimensional offers a family of low-cost mutual funds with a notable track record based on decades of academic research. Advisors may also be able to offer clients access to the lower-cost share classes typically available to large institutional clients like foundations and pension plans. Many individuals normally would not meet the minimum investment required for institutional shares, but some advisors can essentially offer a “group discount” on these lower-cost shares.

Tax Integration

Working with an advisor can also add value through integration with your taxes. CPA-based advisors, in particular, provide integrated services with tax professionals to see that your portfolio is managed with an eye to maximizing your after-tax returns and minimizing your tax liability. Tax management of investment portfolios is a topic that is often overlooked when it comes to investing strategy. While tax-conscious strategies like loss harvesting may not generate a lot of excitement in the financial press, various studies have shown that they consistently add value to a portfolio. For example, Parametric Portfolio Associates, LLC has shown that the tax alpha (excess return) created through strategic loss harvesting over the 11-year period between 1998 and 2009 was an average of 2.4% per year.1

While it is possible for an individual investor to work closely with his or her tax professional to utilize tax-sensitive investment strategies, the reality is that it is too difficult and time-consuming of a process for most individuals to handle effectively by themselves. Hiring an advisor that has a strategic partnership with your CPA can allow for seamless integration of your financial plan and investment management with your tax planning strategies.

Plan for It, Don’t React to It

One of the most important values that an advisor can provide is discipline in turbulent markets. Individual investors typically experience the least success in volatile markets. When individuals yield to their instincts and biases concerning investing, they can make costly mistakes. It is a serious challenge for individuals to avoid trading on emotion, and many enter and exit the market at inopportune times. Often, this can lead investors to do the exact opposite of the #1 rule in investing: buy low and sell high.

Unfortunately, individual investors tend to chase past winners (buy high) and trade on fear during down markets (sell low). The chart below demonstrates the value of having an investment advisor who sticks to a disciplined, long-term investing strategy. During the period from 1984 to 2013, the average individual stock fund investor experienced an annualized return of only 3.69%, just less than 1/3 of the annualized return of the S&P 500. The average bond investor fared even worse, earning only a 0.70% annual return, compared to 7.67% for the Barclays Aggregate Bond Index.

Annualized Returns -- Asset Classes
Staying committed to a long-term investment strategy is absolutely essential to becoming a successful investor. A financial advisor can be a voice of reason through the emotional ups and downs that go along with investing and can help provide the restraint necessary to meet your financial goals.

Time and Peace of Mind

Even if you are capable of being a successful individual investor despite the challenges, an advisor can free you from the drudgery of managing your day-to-day investment matters. In addition, you can rest well at night knowing that you’re working toward your financial goals and a team of professionals is just a call or click away should any concerns arise. Don’t think of working with an investment advisor as caving in and hiring someone to do a job for you, but rather as gaining a partner to help build your financial future.

Ultimately, it is in your hands. We’re just here to lighten the load.


Wipfli Financial Advisors, LLC (“Wipfli Financial”) is an investment advisor registered with the U.S. Securities and Exchange Commission (SEC); however, such registration does not imply a certain level of skill or training and no inference to the contrary should be made. Wipfli Financial is a proud affiliate of Wipfli LLP, a national accounting and consulting firm. Information pertaining to Wipfli Financial’s management, operations, services, fees and conflicts of interest is set forth in Wipfli Financial’s current Form ADV Part 2A brochure and Form CRS, copies of which are available from Wipfli Financial upon request at no cost or at Wipfli Financial does not provide tax, accounting or legal services. The views expressed by the author are the author’s alone and do not necessarily represent the views of Wipfli Financial or its affiliates. The information contained in any third-party resource cited herein is not owned or controlled by Wipfli Financial, and Wipfli Financial does not guarantee the accuracy or reliability of any information that may be found in such resources. Links to any third-party resource are provided as a courtesy for reference only and are not intended to be, and do not act as, an endorsement by Wipfli Financial of the third party or any of its content or use of its content. The standard information provided in this blog is for general purposes only and should not be construed as, or used as a substitute for, financial, investment or other professional advice. If you have questions regarding your financial situation, you should consult your financial planner, investment advisor, attorney or other professional.
Anthony Perillo

CFP® | Financial Advisor

Anthony Perillo, CFP®, is a Financial Advisor with Wipfli Financial Advisors in Milwaukee, WI. Anthony focuses on comprehensive financial planning for high-net-worth investors and families, and also specializes in tax-efficient investing strategies.

No Comments Yet

Comments are closed

Personal Finance for Do-It-Yourselfers

time to read: 4 min