Can I Be My Own Financial Advisor?

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- Chuck Jaffe

Financial planners like to compare what they do to doctors, as if managing money is somehow akin to brain surgery.

It's not.

For years, advisors have hated me for comparing them to plumbers and auto mechanics, but that's a much better comparison than a doctor. While you might be able to diagnose your own physical condition, you could not operate on yourself, no matter how many books and articles you read or courses you sit through.

But you can learn how to do auto repairs, fix plumbing, or make home improvements by reading books, watching television, and taking classes.

You can also learn how to manage your money and buy financial products on your own.

You can even use software products or websites to help with your legal needs, your taxes, and more.

But this is a case where you need to "go strong or don't go at all." Being partially competent to help yourself means you are mostly incompetent; you will not get away without financial help forever, you will just put it off to a point where your own shortcomings become such a problem that you can't overlook them anymore. The problem for most people is that, by the time they reach that point, they have already hurt their finances and have probably done a lot more damage than could have been done by a mediocre advisor with complete training.

Just because you can do these things yourself doesn't mean you should. So if you need someone to fix your financial plumbing or to put a new engine into your investment portfolio to improve its get-up-and-go, take control of the process by finding the right person for the job and by recognizing that the right person might not be you.

Key Points

• If the issues that are pushing you to seek out assistance can't be fixed quickly by some single action, then you are looking for solutions that can last as long as your lifetime. If that's the case, you should be looking for an advisor you can trust for the rest of your life.
• Every job and every task done by every financial advisor of every stripe can be done on your own, without help. But "go strong or go get help." Admit that you know what you are doing, or that you haven't got a clue. The last thing you want is a half-hearted or half-baked effort, especially from yourself.
• The right time to start your search for an advisor is the minute you are certain you need help; the right time to hire an advisor is when you are certain he or she is the best person available to help you.

Chuck Jaffe is a senior columnist and host of two weekly podcasts at MarkWatch. He has also been a guest speaker on several television and radio shows. Copyrighted 2016. Content published with author's permission.