7 Reasons Why It's Finally Time to Stop DIY Investing and Hire a Financial Advisor

In 2020, Canada saw a surge in DIY investment accounts opening. Between January and December, 2.3 million new DIY investment accounts were created.¹ While jumping into the world of investments is an exciting move, this uptick in new DIY investors told an interesting story.

Yes, the amount of new DIY investors rose significantly, but so did complaints and inquiries to IIROC. In fact, IIROC’s Complains & Inquiries Department saw 270 percent more complaints in 2020 than in 2019.¹

With that being said, it’s time to decide - should you be a DIY investor, or should you hire a financial professional to help manage your portfolio? Here are seven reasons why it may be beneficial in the long run to work with a financial professional.

Reason #1: They Deter Emotionally Driven Investment Decisions

Emotions come into play when it comes to making decisions about your own money - even when you don’t realize it’s happening. And when it comes to investing, making emotionally driven decisions can be detrimental to meeting your long-term financial goals.

It can be difficult to be able to put aside feelings and make the right decision every time. A financial advisor is free of any emotional biases toward your wealth, meaning they can make objective, education-based decisions regarding your portfolio.

Reason #2: They Employ a More Disciplined Process

There are no guarantees when it comes to the stock market, even if you choose to follow stock trends closely. But choosing and sticking to a proven investment strategy may offer investors more confidence. Your financial advisor has years of investment experience to use as a guide, and they aren’t inclined to risk your money over a gut feeling or hot tip. 

Reason #3: They Can Help Build More Balance

Would you sell a well-performing asset to buy another financial instrument that is underperforming? This is the type of question that a professional can help you answer. Most DIY investors are reluctant to make such seemingly counter-productive moves, but an advisor knows when it makes sense to manage the risk or when you should wait before making a big move.

Reason #4: They Help Diversify Your Portfolio

The old adage, ”Only invest in what you know," is good advice, but if you don't have experience with various types of financial assets, your portfolio may not be diverse enough to fit your needs. A good financial advisor will make sure that your investment strategy is well-diversified to help put clients into a better position in the case of a market downturn. 

*There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.

Reason #5: They Help You Through Market Volatility

The market is down for the second week in a row, and the value of your portfolio is dropping. Are you going to stick with your investment system? Some DIY investors may not, which could mean missing out on a lucrative rebound. Financial professionals aren’t fearful of adverse market conditions and can help their clients through times of tumultuous market volatility.

Reason #6: They Avoid Calling Tops and Bottoms

You’ve heard the phrase, "buy low, sell high” for years, but attempting to call the tops and bottoms of a volatile market could cause you to lose out - and add unnecessary stress to managing your portfolio. A professional can help keep you focused on the long-term trend of a stock, instead of its short-term highs and lows.

Reason #7: They Help Alleviate Financial Stress

Investing on your own is stressful. If the market is up, you are worried whether you should ride the wave as long as possible or take your profit now. But if the market is down, you’re worried about recovering from a loss. Having a qualified financial professional to guide you through the emotional roller coaster of investing is important to your confidence and long-term success. They can help take the guesswork out of “Am I doing the right thing?” and help develop a strategy based on your long-term goals. 

You have enough on your plate already, there’s no need to make investing harder than it should be. Take your life back and build a stronger portfolio by speaking with an experienced financial professional today.