We get asked all the time, are financial advisors worth it, or should I take matters into my own hands? After all, the VectorVest stock forecasting software tells you what to buy, when to buy it, and when to sell it – for WAY less than you’d pay a financial advisor.

We’re going to help you way the pros and cons of hiring a financial advisor compare dto managing your own investments, whether you’re early on in the retirement planning process or getting ready to retire in the near future.

What Does a Financial Advisor Actually Do?

These specialists advise clients on how they should invest their money. This can be as simple as investing in stocks or providing life insurance policy suggestions. They can even help you with tax planning.

There are a few different types of advisors – some work under an agency while others are independent. There isn’t nearly as much work that goes into becoming an advisor as you may think. You just need to pass one or more exams to become licensed. So if anyone can become a financial advisor, why not handle your finances yourself?

Financial advisors don’t do what a lot of people think they do. They’re not constantly scouring the stock market trying to find you the latest opportunities. They don’t monitor the positions you’re holding and pinpoint the ideal time to buy and sell.

Instead, they mostly invest your capital into mutual funds, ETFs, government bonds, etc. They encourage you to leave your money in these funds until you’re ready to retire, because time in the market matters more than timing the market. At least, so they say.

How Financial Advisors Are Compensated

So are financial advisors worth it? We have to talk about how they’re actually compensated to accurately answer that question. There are a few ways you could end up paying your advisor:

  • Hourly Rate
  • Commissions Only
  • Quarterly/Annual Retainer
  • Percentage of Assets Under Management (AUM)
  • Combination of Commissions & Other Fees (like hourly/retainer)

Generally, when paying a company using the percentage of AUM model, you can expect to pay at least 1%. So if you want to invest $100K, you’ll pay $1,000 a year.

Note that when you begin to accumulate more wealth, their compensation increases relative to your investments, but has their value increased?  Let’s say you are near retirement and have a $2 million account.  That would imply they earn $20,000 a year. Has the value they provide increased by 20x?

On the other hand, hourly rates can be as much as $100/hour, and more experienced advisors charge anywhere from 2-5x this amount. That’s a lot of money, so are financial advisors worth it?

Are Financial Advisors Worth It for MOST People?

You’re probably starting to get a sense of why you don’t need a financial advisor. You can do much of what they do on your own, and save the 1% you’d have to pay them. Nobody is going to have your best interests in mind more than you will.

The plans financial advisors come up with these days are far too cookie-cutter. 9/10 financial advisors will suggest spreading your funds across 4-5 different funds and dollar cost averaging.

Do you really need to pay someone to automate investment contributions? You aren’t getting your money’s worth unless you find a diamond in the rough in your advisor. We’ve seen so many instances where the returns don’t even cover advisory fees, let alone protect/grow wealth.

Still, there are situations where hiring a financial advisor might make sense.

When is a Financial Advisor Worth It?

Say you’re making a solid income and are seeing your savings account stack up. You know that you should let your money work a bit harder for you and you want to invest it – but you’re far too busy building your own business to take on another responsibility.

If you can find a trustworthy financial advisor with a track record of success, it may be worth it to let them handle your finances so you can focus on what matters most in the present: scaling your business and working to solidify the cash flow you see.

These are some of the other scenarios where you may be better off hiring a financial advisor:

  • You’re dealing with complex tax situations, such as multiple income streams, business ownership, or large capital gains
  • You’re navigating a major life event like an inheritance, divorce, or sale of a business and need short-term guidance
  • You want help with estate planning coordination, including trusts, beneficiaries, and wealth transfer strategy
  • You’re close to retirement and unsure how to structure withdrawals to manage taxes and longevity risk
  • You need guidance on insurance planning tied to wealth protection or estate considerations
  • You’re managing assets across multiple accounts or institutions and want centralized oversight
  • You have limited interest in learning investment basics and prefer full delegation

Ultimately, we only recommend going with a financial advisor when you cannot afford a few hours of your time every week managing your finances.

And depending on the strategy you take for yourself, it may only be a few hours a month! Who doesn’t have a few hours a month to spare when it comes to their financial future?

When it Makes Sense to Handle Your Own Investments

It sounds so daunting, but investing for retirement isn’t rocket science. And you don’t even have to do it on your own – you just don’t need a financial advisor. You can rely on software to tell you what to buy, when to buy it, and when to sell it.

This also ensures you’re always positioned for success, rather than just letting your portfolio weather the storms that come and go. Yes, the market does tend to push to new highs after a dip – but why not move to cash to maximize returns when the waters get murky? Then, you can go back in and buy stocks at a discount. A financial advisor won’t offer this level of oversight.

There are so many resources at your disposal if you want to take matters into your own hands. You can compare Tipranks vs Motley Fool, Seeking Alpha vs Morningstar, and more. You can even consider using AI to trade stocks.

That said, VectorVest is the only solution you need to invest with precision and clarity. This stock advisory helps you find the best opportunities based on your specific goals with a variety of stock screeners. Then, it tells you when to buy and sell them to maximize returns, while minimizing human error and emotion from your strategy.

It’s a fraction of what you’d pay a financial advisor, and you get way more control over your investments. See VectorVest in action with a free stock analysis today.

Questions to Ask Yourself Prior to Hiring a Financial Advisor

If you decide a financial advisor is worth it, you need to do your due diligence and choose one you can trust. Slow down and get crystal clear on what you’re actually paying for. Ask these questions:

  • Do I need help with complex issues like estate planning, business taxes, or trust structures – or just basic investing?
  • What exact services will this advisor provide beyond asset allocation?
  • How are they compensated, and does their pay increase simply because my account grows?
  • Are they a fiduciary, legally required to act in my best interest at all times?
  • Can they clearly explain how they decide when to buy or sell, or is the plan mostly “stay invested”?
  • What has their actual performance looked like after fees over full market cycles?
  • How often will they review and adjust my portfolio – and based on what data?
  • Am I paying for advice, or am I paying for convenience and reassurance?
  • Could I replicate most of this process using modern tools and save the annual fee?

Pay close attention to the answer you get. If anything feels vague or circular, that’s usually your sign to go the other way.

How to Take Your Investments into Your Own Hands

Investing your own capital is easy with VectorVest. Start by defining your time horizon – how many years until retirement and whether your focus is growth, income, or a mix of both.

Then you need to get comfortable with basic principles like diversification, position sizing, and risk limits. You don’t need dozens of holdings to be diversified, especially if you end up investing in mutual funds. Just a few different funds is enough since these are already inherently diversified.

From there, consistency matters more than creativity. Set a regular contribution schedule and stick to it. Use objective tools that tell you when a position is strengthening and when it’s losing momentum, rather than reacting to headlines or emotions. This replaces guesswork with rules.

VectorVest has a daily marketing timing indicator that shows you conditions at any given time. Our investors are always the first to know of major market moves, so they can move to cash and protect their portfolios before a downturn. Then, they can buy back in when conditions are more favorable. This is a smarter approach to dollar-cost averaging and time in the market.

Review your portfolio periodically, tighten risk when conditions change, and stay disciplined during volatility. VectorVest provides a wealth of resources if you’re ready to get started but still not confident in where to begin.

So, Is a Financial Advisor Worth it?

The short answer is no – at least, most of the time they’re not worth it.

If you legitimately cannot justify the few hours a week (or less, depending on your goals) that it takes to manage your own financial future, you may be better off with an advisor in your corner.

Otherwise, you’ll save a ton of money and protect your own interests by taking matters into your own hands. We’ve outlined the steps to getting started so you can control your future and enjoy peace of mind every step of the way. So, it’s time to make a decision – and that’s something only you can do for yourself. Best of luck!