Exploring DIY Investing vs. Hiring a Professional Advisor: What’s Right for You?
The popularity of self-directed brokerages in Canada has seen a significant increase, with overall satisfaction scores rising by 33 points to 631 in 2024, according to a recent J.D. Power survey. This trend indicates a growing approval of DIY investing, but the question remains – is it the right choice for you?
DIY investing allows individuals to manage their investments without professional help, offering flexibility and potentially lower costs. However, it requires knowledge, discipline, and the right tools and technical expertise. DIY investors are responsible for selecting and managing investments such as stocks, bonds, mutual funds, or ETFs on their own, often using discount brokerages for transactions.
While DIY investing can be cost-effective, it also demands a significant amount of time and effort. Investors need to stay updated on market trends and economic indicators, conduct research, and regularly monitor and adjust their portfolios.
On the other hand, hiring a professional advisor or planner can provide expert guidance, access to advanced tools, emotional discipline, and time-saving benefits. Financial advisors assess clients’ financial situations, offer personalized financial plans, and monitor investments to make adjustments based on market conditions and personal changes.
However, working with a financial advisor comes with higher costs and potential conflicts of interest. The quality of advice can vary between advisors, and investors may have less control over their investment decisions.
Ultimately, the decision between DIY investing and hiring a professional advisor depends on factors such as financial knowledge, time availability, and comfort with managing investments. It’s essential to weigh the pros and cons of each approach to determine what is best for your financial goals and preferences.
Whether you choose to go the DIY route or seek professional advice, the key is to have a solid investment strategy in place to secure your financial future. If you have questions, tips, or story ideas about personal finance, feel free to reach out to us at dotcom@bellmedia.ca.
Christopher Liew, a CFA Charterholder and former financial advisor, shares personal finance tips for Canadian readers on Blueprint Financial.
