Do You Need Financial Advice? If So, From Who And How?

We like to have conversations here at The Juice. We take a handful of themes and develop them over time — between distinct, but related installments. Your response to this approach has been great. We’re seeing more emails from you with feedback and personal stories. Please keep them coming using the form at the bottom of this email. And feel free to pass this link to a friend so they can subscribe to The Juice.

As The Juice continues to grow, we’ll keep it up.  

So, here we go … Last week, in Don’t Get Drunk On High Savings Interest Rates, we put the high-interest rate environment in perspective while asking if you use a financial advisor: 

Whatever you do, don’t let the allure of 5% savings rates today derail the power of a long-term saving and investing strategy where you adhere to basic, but proven principles that require time and patience for the most powerful results. 

In the next couple of weeks, we’ll cover ways you can use financial professionals and other advisory services to help guide your saving and investing. Because, even though we live in an age of do-it-yourself everything, not everybody wants to do everything by themselves. Sometimes, we need expertise, technology or both to help lead the way.

In response to that post, we heard from you and featured a financial advisor story earlier this week in You’ll Love This Juice Subscriber’s Amazing Retirement Situation. Then, we considered an old school investing strategy there’s a good chance you use, in A Solid ETF Strategy? Investing In Companies You’ve Never Heard Of:

If you’ve ever heard anyone say invest in what you know, the approach likely originated from Lynch. 

Right there, we did more in three newsletters than most others do in a month. That is, if the goal is to make you a better, more clear-headed investor. 

If, just a few years ago, you put all of your eggs in the collective basket of today’s top five Trackstar stocks — the stock market’s biggest tech names — you’re likely somewhere between better off financially and rich today. 

Apple (AAPL) is up 256% over five years. Amazon.com (AMZN) 67%. Nvidia (NVDA) 793%. Microsoft (MSFT) 230%. And the artist formerly known as Facebook, Meta Platforms (META) 120%.

Maybe NVDA wasn’t quite so obvious in 2018. But you catch our drift. You also know that for every person who made serious bank on those stocks, there are literally dozens who say they did, but didn’t OR openly admit they missed the boat or just didn’t have enough capital for the investments to be life changing.

Or maybe you didn’t go all-in on these invest in what you you know — mostly — household names because you warned yourself or your financial advisor warned you that putting all of your eggs in one basket is not a long-term investing strategy. You can’t take on that much risk. You require diversification. 

It’s this investor psychology that we don’t address enough. Things like worrying about too much risk, lack of diversification and, flat out, losing money at the same time as you fear (or kick yourself for) missing out. 

This is where some form of financial advisory comes in.

So let’s consider the levels. 

Set it and forget it. No doubt, you can do this without anybody’s help. Buy SPY and QQQ regularly via automatic investments and call it a day. 

Or maybe you need a robo-advisor? 

Answer a few questions about your investing profile, timeline and goals and a robo-advisory service creates a slate of investments — often ETFs appropriate for your situation — that you can basically set and forget. Most robo-advisors automatically rebalance your portfolio for you. 

Betterment is an example of a pioneer in this space. 

While traditional investment firms (think Fidelity and Schwab) all jumped on the bandwagon with formidable robo-advisory options, the beauty of many newer FinTech (financial technology) companies is that they provide comprehensive services. For example, Betterment offers cryptocurrency portfolios as well as high-yield savings and checking accounts. So, theoretically, you could ditch a big or otherwise traditional bank and use Betterment not only to invest, but for day-to-day and long-term personal finance. 

That said, you might want something closer to conventional financial advisory services. 

If so, you might be best off looking at Fidelity, Schwab, Vanguard or any number of the firms who have been doing this for decades. 

Generally, you can gain access to a team of financial advisors with a relatively low minimum balance, often around $25,000-to-$50,000. It’s sort of like going to the doctor and seeing a different doctor every time. They’re all qualified. You just don’t build a relationship with the same person. 

If you have more cash — we’re talking six figures — these big firms often give you a dedicated financial advisor. Someone you can call for everything from a stock trade to more general investment advice. This person will generally check in with you every quarter or twice a year to review your investment plan. 

High rollers — we’re talking at least mid-to-high six figures, but probably a million-plus — can have access to wealth management planning. This includes not only a dedicated financial advisor, but specialists who can help you with everything from estate planning to taxes to charitable giving. 

So, as with so much in life, investment assistance, advice and support comes in levels. 

The Bottom Line: Of course, there are millionaires who probably manage their own money. Or maybe only have a tax person. However, broadly speaking, the more personal financial balls you have in the air (the more assets you have), the more you might need the assistance of one or more financial professionals. 

That said, if you only have $10 to invest, you’re not completely left out in the cold. You can find many solid robo-advisory services who will do the dirty work of selecting investments for you, so you can hopefully sleep better. You might stay this course forever or decide one day that it’s time to move up to some form of more personalized service. 

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