Should You Use A Financial Planner Or Do It Yourself ? The Pros And Cons Of Both...
Let's get one thing out of the way: I'm a financial planner. So you might expect me to spend the next thousand-ish words convincing you that you desperately need one. I’m not.
The truth is, some people genuinely don't need a financial planner, at least not right now. And some people really do.
Here are five reasons to hire a financial planner, and five reasons to do it yourself.
Five Reasons to Hire a Financial Planner
1. Your financial life has a lot of moving parts, and they interact in ways that aren't obvious.
When your finances are relatively simple (steady paycheck, one retirement account, no financial dependents), a good book or a free calculator can get you pretty far. But when complexity starts stacking up, the interactions between all the pieces start to matter a lot, and that's where things get expensive to get wrong.
Take this example. You're a teacher with a CalSTRS pension and a 403(b) you've been contributing to for fifteen years. Your spouse has a 401(k) and a Roth IRA. You've both been responsible: saving consistently, staying out of credit card debt, doing the right things to pay down your student loans. And now life is getting more complicated all at once.
There's a baby on the way. You're looking at a bigger house, which means a larger mortgage and a higher interest rate. You've been thinking about finally getting more serious about investing, but now you're not sure if that's the right move with so many big expenses coming. And somewhere in the back of your mind, you're wondering whether teaching is still the right call. Yes, the benefits are great, but it seems every year more gets asked of teachers and the pay never goes up more than a tiny COLA. The private sector is looking tempting, but you're not sure how to even begin thinking about whether the tradeoff is worth it.
Chances are these are some of the questions that might be going through your mind:
Should we invest more right now, or keep cash on hand for the baby and a possible move?
What does a right-sized emergency fund even look like with a baby on the way?
What happens to my pension if I leave teaching? Should I cash it out?
Could leaving teaching for a higher-paying job actually come out ahead, or does the pension make that math more complicated than it looks?
My spouse wants to retire at 62 too, not 65. Is that realistic? What would it take?
How does Social Security fit into any of this, especially since I haven’t paid in since I was working part-time in college?
Are we leaving tax money on the table by not coordinating our accounts better?
If we buy a bigger house now, does that change when we can retire?
None of these questions exist in isolation. The answer to one changes the answer to another. Whether you keep teaching affects the pension, which affects retirement age, which affects Social Security timing, which affects how much you need in your investment accounts, which affects whether you should be saving more aggressively right now or paying down the mortgage faster.
This is the kind of situation where a good financial planner who knows what they’re doing can help you think through these decisions, and what order to tackle them in.
2. You know what to do. You just get stuck procrastinating.
Procrastination is probably the most underrated reason people hire planners, and the one people are least likely to admit out loud even though it’s incredibly common, especially among people whose brains run a little hotter than average (hello my fellow overthinkers, researchers, and people who want to be sure before they act.)
The problem is that in personal finance, certainty never fully arrives. There's always another variable, another article with a different take, another reason to wait until you feel more sure.
A planner can help you cut through the analyses paralyses. Not by telling you what you have to do, but by helping you understand what the tradeoffs actually are, and giving you the confidence to make a choice and move forward.
3. You're going through a major life transition.
Career change. Divorce. Death of a spouse. Early retirement. Leaving a job with a pension. Receiving an inheritance. Having a child later in life.
These moments tend to have financial deadlines buried inside them of decisions that can't be undone, or that become much more expensive to undo. A pension election is a perfect example. Once you submit that paperwork, your choice is generally final. Getting that wrong, or not understanding the options clearly before you choose, can cost you tens of thousands of dollars over a retirement.
The same goes for divorce. How retirement accounts are divided, whether you keep the house or the 401(k), if both of you are responsible for the graduate student loans, who’s going to cover future higher education costs…these aren't just legal questions. They’re also financial questions with potentially lifelong consequences. And while a financial planner can’t and shouldn’t replace an attorney, they can make sure the financial side of the equation is understood clearly before you sign anything.
Transitions are when the stakes are highest. They're also when you're most likely to be overwhelmed. Getting a second set of eyes during these moments is often where advice pays for itself many times over.
4. You want a tax strategy that goes beyond TurboTax.
Tax software is good at filing your taxes accurately based on what already happened. It is not good at helping you plan ahead.
A real example: A couple in their mid-50s has $1.2 million sitting in traditional 401(k)s. They plan to retire at 60, before Social Security and Required Minimum Distributions kick in. That gap of roughly a decade of lower income is an enormous opportunity to convert some of those pre-tax dollars to Roth at a lower tax rate. If they don't take advantage of it, they'll likely pay higher taxes in retirement when RMDs force large taxable distributions on top of Social Security.
This kind of planning (Roth conversions, asset location, tax-loss harvesting, timing of capital gains) doesn't require a complex situation to matter. It does requires thinking about the future and understanding the ever-changing landscape of tax law. Many people leave thousands of dollars on the table simply because no one showed them the map.
5. You have a pension and you're not sure how it fits.
Pensions are genuinely complicated. Not because they're poorly designed (despite what the media headlines on funding statuses may have you believe), but because the decisions around them depend on so many personal factors: your age, your health, your spouse's income, when you plan to retire, whether you might leave your employer before retirement, and what your other savings look like.
Common questions people get wrong, or just never ask:
Should I take a lump sum or monthly payments (if that's even an option)?
What happens to my pension if I leave my employer before I'm fully vested?
How does my pension interact with Social Security?
Should I take a reduced benefit with a survivor option, or the full benefit and manage the risk another way?
These are questions where the right answer is different for everyone, and getting them wrong is almost always irrevocable.
Five Reasons to Do It Yourself
1. Your finances are genuinely straightforward.
If you don’t have anyone financially dependent on you, are renting, contributing to a 401(k) through your employer, have an emergency fund, feel on top of your cash flow, and don't have any pressing decisions on the horizon you may not need an advisor right now.
To be Captain Obvious, the basics of personal finance aren't that complicated when your situation isn't complicated. Contribute enough to get your employer match. Keep your investment fees low. Build an emergency fund. Keep lifestyle inflation in check. Don't try to time the market. Don’t spend more than you make. These principles are well-documented and freely available.
If you can implement them consistently, you're ahead of most people (and I’m giving you a virtual high five through the screen right now.)
2. You're willing to learn about money, and you actually enjoy it.
Some people genuinely like learning about money. If you're the type who finds personal finance interesting and who actually reads the book, listens to the podcasts, and applies what you learn, you can go pretty far on your own.
Great free and low-cost resources exist, especially if you have a library card: The Simple Path to Wealth by JL Collins, the Bogleheads forum to learn about low-cost indexing, NOLO for basic estate planning questions. None of these replace a professional for complex situations, but they're legitimately good for building a solid foundation of knowledge.
The caveat: learning about finance and implementing a complete plan are two different things. You can know a lot and still benefit from a second set of eyes. But if you're engaged, curious, and willing to do the homework, a lot of this is learnable.
3. You're a straightforward investor who just needs a good portfolio.
If your main question is "How should I invest my money?" and you're not asking it in the context of a complex tax situation, equity compensation, or an inheritance, the answer is probably simpler than you think.
A three-fund portfolio (a total US market index fund, a total international index fund, and a bond fund) in low-cost index funds has outperformed the vast majority of actively managed funds over long time periods. This is a well-documented way to grow your wealth for a low fee, and it's available to anyone with an account at a major brokerage like Vanguard, Fidelity, or Schwab.
You don't need to pay someone to pick stocks or a “sophisticated” (read: usually overly complicated) strategy. You should prioritize low fees, diversification, and the discipline not to panic-sell when the market drops (which, to be fair, is harder than it sounds).
4. You can't afford it yet (and that's okay).
Good financial advice isn't cheap. A comprehensive financial plan from a fee-only planner typically runs in the four to even five figures. Ongoing financial planning relationships can cost either a flat fee of thousands of dollars per year, or could be 1% of managed investment assets per year, which might sound small but adds up over time.
If you're early in your career or just building your financial foundation, spending thousands of dollars on a financial plan might not be the right call. Your money might do more good paying down high-interest debt or building your emergency fund.
There's no shame in starting out. Rather than making a major ongoing financial commitment, consider options like meeting with your HR department’s benefits counselor or having a one-time consultation with a fee-only planner.
5. You've already done the hard work and just need to stay the course.
Some people reach a point where they've built a solid financial foundation, they have a plan, and mostly they just need to stick to it. If you're in that place (you've got a diversified portfolio, you know your retirement savings goal, you understand your benefits, you have an estate plan in place, etc) you may not need ongoing advice.
Markets will go up and down. You'll be tempted to “just do something” during the scary moments. The main job at that point is not to blow up what you've already built. If you have the temperament and the knowledge to stay disciplined without someone talking you off the ledge, you may be just fine on your own.
The Bottom Line
Neither path is automatically better. The right choice depends on your situation, your complexity, your temperament, and where you are in life.
What I'd caution against: convincing yourself you're a DIYer because advice feels expensive, when what's really happening is that you're avoiding a decision you know you need to make. Avoidance has a price too, even if it doesn't show up as a line item on your account statement.
And what I'd caution against on the other side: hiring a financial planner as a way to outsource thinking about your money entirely. A good planner is a thinking partner, not a substitute for understanding your own financial life.
Thus concludes the five reasons you should hire a financial advisor or do it yourself. If you're leaning toward the former and think we might be a good fit, I'd love to get to know you better. I work with curious overthinkers, people with pensions, and anyone who's stayed up until 3am worrying if they're missing something about their money.
