investing portfolio management ready for an advisor

Is It Time to Graduate from Managing Your Own Portfolio?

by Curtis Hearn

With the ubiquity of apps like Robinhood offering zero-fee trading, it might seem like anyone can DIY and manage their own investments. But even if app-enhanced stock trading isn’t your thing, you can easily buy shares of mutual funds or ETFs that track major indices, like the S&P 500, on your own. If you keep seeing returns, then why fix what isn’t broken?

However, as assets start to increase and you potentially diversify your portfolio, and as investing advice proliferates on the internet and social networks, it becomes a challenge to keep tabs on everything. Rather than become overwhelmed, it is probably best to consider the help of a professional wealth advisor to help provide more comprehensive investing portfolio management. 

Let’s have a look at a few questions you might ask yourself, which can help you evaluate the decision to lean on the advice of an investment professional who can offer a more comprehensive strategy for wealth building. 

Do I Have the Investment Knowledge and the Time?

As your portfolio grows, you will most likely want to diversify into additional asset classes or investment strategies you hadn’t considered in the past. 

The more complex the investment, the more knowledge — in addition to the time necessary to acquire that knowledge — is required. Most likely you won’t have the hours to invest in tracking market movements and daily performance of investments.

As such, as beginning investors see growth in their portfolios, and as they wish to consider riskier investments in order to take advantage of potentially higher returns, they should turn to a wealth advisor to guide them. 

While mutual funds that invest in riskier assets, such as corporate bonds or emerging markets, have existed for decades, the percent allocation of such investments to the overall portfolio should be left to investing professionals. Further, allocations can shift over time, depending on life changes and large expenses, and wealth advisors can be knowledgeable about how to adjust portfolios to accommodate such events.

More complex investments require more knowledge, and even a level of experience and sophistication, in order to see success. 

Do I Have My Emotions in Check?

The ability to check account balances anytime anywhere can wreak havoc on any investor’s nerves. Social media and the 24/7 news cycle don’t help either. Indeed, long-term investing requires emotional discipline and focus.

A third-party wealth advisor has the ability to view your portfolio, investing goals, preferences, risk tolerance and expected expenses and life changes from an outside, professional perspective, which is invaluable. You can profit from the years of experience that the advisor may have accumulated by working with other clients and helping them grow their wealth.

Do I Want More Than Software Making My Investing Decisions?

The rise of low-cost robo-advisors has made them an attractive alternative in the last few years. Besides their pricing, they rely on algorithms, models and machine learning to select assets for you. A little bit of Silicon Valley running your portfolio can’t be a bad thing, right?

While robo-advisors create model portfolios based on the portfolio size, risk tolerance, life stage and other personal factors, keep in mind that as portfolios grow in size, so do the robo-advisors’ fees. Plus, robo-advisors are just as limited in being able to predict economic, political or environmental events that may cause market fluctuations and downturns.

Additionally, your personal situation, including expected expenses and life changes, may not be as black and white as the one on which the roboadvisor’s model is created. As such, you might need more than a software app to help you build wealth.

Do I Have a Team in Place?

While you might have a friend or relative whom you consider a savvy investor, chances are they did not build their portfolio alone. 

A mobile trading app or an online investing account does not provide a team of professionals who can advise you on the best mix of assets and strategies to help you realize your goals. While a wealth advisor might be your day-to-day point person and consultant, the firm in which they work should have teams of analysts and managers who study model portfolios and make recommendations on behalf of the advisors’ clients. 

In this manner, by working with a wealth advisor like Gratus Capital, you wouldn’t be working with a single individual, by extension you’d be working with several, or perhaps the entire firm. The firm’s success is tied to your success and naturally a relationship forms built on trust and mutual goals. This is why that personal touch may be worth looking into when it comes to managing your money.