The 2nd article in our series examines a question most folks ask when they begin to accumulate enough extra cash to warrant investing it: Should I try to do this myself? The short answer is, “it depends.” The long answer is a bit more complicated: “depending on how much cash we are talking about, as your options increase, so does the complexity – think about working with a financial advisor.”
It all hinges on a comfort level. Many professional women are comfortable with taking a stab at it, until they begin to do their research and find it overwhelming. Some women feel more comfortable asking for advice from a friend “in the biz,” or maybe an “ex,” a brother or father who has fared well in the market. The truth is there is plenty of accessible financial information online, but few resources to answer your questions, based on your needs and goals. Often the answers you receive from friends and family is based on what’s been good for them in the past.
Of course there are plenty of options when it comes to financial advisory services, most come with a price tag, but ask yourself what will give you the most peace of mind? Can I afford to make an expensive mistake? Do I have the time to review my portfolio on a regular basis? On the other hand, also ask yourself truthfully, with a little coaching and consulting can I develop a comfort level doing this on my own?
47% percent of men who do not use an advisor say it is because they can do a better job of investing than a professional. Only 30% of women feel the same. According to Bloomberg, as of October 2020, only 41% of women work with a financial advisor. Surveys show many women do not use an advisor because they either feel they either do not have enough assets to warrant an advisor, or are not able to afford an advisor. Times have changed, and many financial investment platforms now have low or no minimums, and reasonable fees as well. There is a growing number of financial advisors who provide fee-based rather than asset-based payment models, which can take the form of a monthly retainer, hourly rate or flat rate, depending on the service.
Consider the following:
- How complicated is your financial position?
- Single and looking for advice about your 401(k)
- About to get married
- Need Retirement or RMD strategy
- Going through divorce
- Having a baby
- Need to increase savings
- Must pay down debt
- Kids need a 529
You see what we mean? The more moving parts, the more it might make sense to hire a professional to help you create and manage a portfolio, taking into account goals and cash needs. Research shows that due to gender bias, many women feel far less knowledgeable about financial products and are also more likely to be seeking security as their primary objective. If that is the case, a financial advisor can help you navigate complex financial situations, answer questions and provide comprehensive financial planning.
- Has your small portfolio done well enough, or your wealth increased, so that it is time to consider more comprehensive financial planning?
- Big raise and large bonus on the way
- Just inherited stock or other assets
- Sold your business
- Need tax-efficiency
- Looking for better returns than you got on your own
- Insurance concerns
- Looking to invest
Now that your nest egg has grown, can you continue to monitor the market and your portfolio, and make changes as needed in reaction to current events? Are you interested in expanding your portfolio to include socially conscious investments and need an ESG road map? Working with an advisor who is also a fiduciary can save you time trying to stay up to date on the latest developments in investments and taxes, plus help you develop the discipline to stick to a plan.
Don’t think of financial planning as a privilege reserved only for the wealthy. Your goal should be to find one you feel comfortable working with so you’ll put a plan in place that will ultimately get you to the next level.
Contact Us: TFGFA wants to help women take more control of their financial lives. There are certainly folks who are well suited to manage their own money, and enjoy the freedom of doing so. Determining which options are best for you depends on your goals, needs, knowledge and current financial situation. The expectations of a professional woman or business owner may be quite different than a woman managing legacy wealth or one that has inherited wealth.
Feel free to contact me, Cory Lyon, Financial Advisor, directly at 561-209-1120, with any questions regarding your financial health. TFG Financial Advisors offers a complimentary, no obligation, 360-degree portfolio assessment. At TFGFA, we believe in customized investment portfolio design and personalized asset management. I act as a fiduciary for my clients.
Part #1 can be found here: https://www.fuoco.cpa/perspectives-and-perceptions-of-women-and-investing/
TFG Financial Advisors, LLC is a registered investment advisor. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities, and past performance is not indicative of future results. Investments involve risk and are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed here.
