The first reason is that life is busy. And the older you get, the more complex your financial life becomes as your financial wealth grows. That’s why many people find it difficult to manage their investments, taxes, savings and retirement accounts on their own. Most of us focus on careers, raising families, or running a business – as we should. While life happens, financial assets are underemployed. Your investment and retirement accounts tend to accumulate as “financial junk drawers” without any monitoring or a clear purpose.
The second reason is that using a financial advisor helps you to avoid the natural tendencies of humans to make bad investment decisions. Our brains are really not wired for risk taking and having several biases working against us. In fact, investor behavior is usually the main culprit for portfolio under-performance. It’s just part of being human. Vanguard recently published a research paper that concluded that investors, acting with an advisor, could add up to 3% to your annual return over time. Click Here to read the report.
Thirdly and most importantly, some things in life can’t be delegated. Like playing with your grandkids or watching your son in a baseball game. Getting help with your financial life, fortunately can be delegated giving you time to focus on life.