Why Hire a Professional?
You can do plenty of things yourself, but for many tasks like managing your hard-earned savings, you need the skill and expertise of a professional. Especially when it comes to your finances, the professional’s fees are paltry compared to the value they bring.
For mundane tasks we know we can do ourselves, it’s second nature to roll up our sleeves and get the job done. For more complicated endeavors, there is no way you can go it alone.
You need to hire an attorney to make a will or help with a divorce. A real estate agent can walk you through the buying or selling of a home. You can increase your wealth by working with a financial advisor on your investments, financial plan or other money matters.
Some people say that some of these things can be done without the help of a pro. Granted there are plenty of do-it-yourself places for wills, trusts, investing and medical care. But let the buyer beware.
People who prefer going solo usually argue that it saves money. Sometimes, they have trust issues or they think they can do the job just as well if not better than the professional. Of course, a few DIY-ers get lucky, but many make unwise choices and don’t realize the consequences until much later.
Take for example the person who does his own will online. Without an attorney or advisor to check it over, his heirs might belatedly find out that he made a mistake or the will wasn’t properly written, according to the state’s laws.
In our business of financial planning, we see too many do-it-yourselfers play the stock market game by actively trading, watching cable news and reading money magazines. Do these amateurs really think they have an edge over thousands of Wall Street analysts and institutional investors? No wonder so many of them lose money and make terrible bets.
What should we as consumers look for when we hire help with financial matters? Here are some basics to look for:
- Education. Are they qualified and educated in their field? What degrees or designations do they hold?
- Tenure. How long have they practiced?
- Licensing. Are there state or federal standards needed for them to work in their profession?
- What don’t they know? Are they willing to admit when they aren’t qualified to help? Look at it this way: A medical general practitioner doesn’t give you brain surgery. You need a brain surgeon. Both are doctors, but both have very different professions and clients. Likewise, an accountant can’t help you make financial plans or allocate your investments properly.
- Code of ethics. Do they adhere to one?
- Transparency. Do you understand what they do for you, how they do it and how they get paid?
This list is merely a good place to start. The main point is that you hire a professional for their expertise, experience and professional judgment. You admit that you don’t know everything and you are ready to trust an expert to guide you.
In the long run, a professional potentially saves you money by avoiding mistakes and saving you time and energy that you can spend on more important tasks.
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Sterling Raskie, MSFS, CFP, is an independent, fee-only financial planner at Blankenship Financial Planning in New Berlin, IL. He is an adjunct professor teaching courses in math, finance, insurance and investments. His blog is Getting Your Financial Ducks in a Row, where he writes regularly about investments, retirement savings and financial planning.
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