Do you need a financial advisor

Do You Need a Financial Advisor? 5 Questions to Ask Yourself

I have noticed that a lot of people are talking about the increased availability of financial technical resources, robo-advisors and generalizations about Millennials and their preference for using of this information to manage their own money. With all this technology and information at your fingertips, do you need a financial advisor anymore?

I, myself, used to manage my own money. I considered myself a smart person. I was educated in financial theory, financial history and even worked as a research analyst for an investment bank. When I first left financial services, I continued to make my own trades. I had some big wins, but I also had some big losses. In addition to the standard comparison to indices to measure my performance, I did some analysis to try to understand what I did right, but more importantly, I took an honest look at what I did wrong. I realized that despite all of my training and analysis of data (I even started using technical charting to improve the timing of trades,) I still fell victim to behavioral biases.

To help counteract that, I started developing a checklist to consider before I made a trade (this was before I really knew what behavioral biases meant.) However, I still found myself making not-so-good trades. I would hang onto losers because I couldnt bear to admit a loss. Or, I might sell too soon because I was panicked by some piece of news or big market reaction.

I tried using technology to help to trigger buys and sells. I tried using options to help manage risk; yet still, I would sometimes ignore the rules because I thought there was a signal that meant this one wouldnt follow the rules. And then I got busy with life and decided to get some professional help…with my finances, I mean. I am still actively involved in the decisions, but I rely on an advisor to help guide and check me.

So how do you know if you would benefit from an advisor to help you check your behavioral biases? Ask yourself:

  1. Have you done an honest analysis of your portfolio management decisions and results?
  2. Do you tend to be heavily influenced by people or the media that cause you to buy assets at the top of their bubble?
  3. Do you tend to sell assets at the bottom?
  4. Do you understand your real risk tolerance? Do you know how to build a portfolio that matches that risk tolerance? How hard is it for you to accept losses?
  5. Do you understand and have access to all of the investment options available to you? Do you really have time to do all that research on your own?


Kriss Poll

Kriss Poll

Kriss Poll - Chief Operations Officer, Relationship Management Integration

Kriss is passionate about helping organizations unlock the power of behavioral understanding to successfully accomplish business goals. She works with leaders to further develop their organizational goals and to build collaborative teams that can execute. Kriss believes that tailoring solutions, communications, and experiences for customers, vendors and employees based on behavioral insights will propel companies ahead in our highly interactive and competitive landscape.

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