Why use professionals

You know about the time:cost:quality trade-off?

You can have something nicely done, quickly, but it will probably cost more. Or you can save money by lowering your expectations about the time it will take and the finished product you’ll end up with. Or you can have something that’s top quality but it will take a little longer and cost a little more.

You can’t have speedy delivery plus low cost, plus high quality. Life just doesn’t work that way.

This article explores this challenge a little deeper.

An analogy for you

Joe and Samira decided to extend their kitchen. They didn’t have the budget to pay professionals and had some spare time, so they did most of the work themselves. However, they weren’t experts at DIY, so they had to keep re-doing things they failed to get right the first time. Eventually, they were happy with the end product as it was low cost, but it took ages (and lots of hard work) to complete.

John and Mary had a loft conversion done at their house. They’d seen too many episodes of Grand Designs to even try project managing the build themselves. Instead, they hired a project manager, a main contractor and an interior designer. The main contractor subcontracted to other experts, including plumbers and electricians.

John works as a consultant, so the couple had the budget but not the time.

He says: “I expect people to pay me for my expertise, so I am happy to pay experts for their expertise.”

What the experts say

Benjamin Graham was a finance and investment guru, mentor to Warren Buffet, and considered to be the father of value investing. He excelled at making big money in the stock market without taking big risks. His most famous book is The Intelligent Investor.

He said: “The investor’s chief problem – and even his worst enemy – is likely to be himself.”

You can read more about him on Investopedia here > https://www.investopedia.com/articles/07/ben_graham.asp

What this means to you

Do you value paying an expert? Or would you prefer to get free advice from Google, social media or your mates down the pub?

As we told you recently, Plan100 is now an officially accredited firm by CISI – in fact, we’re the 60th, as explained in this article in IFA magazine >

We have studied hard to gain the relevant qualifications and operate in a highly regulated industry to reassure our clients. For that, we charge a fee.

But don’t worry. The value you get from paying a financial planner should far outweigh the cost.

Benefits of expert financial advice

This graphic from Humans Under Management shows all the things we do for clients at a glance.

Our friends at Vanguard call the difference we make ‘Adviser Alpha’ and did a study to identify the seven main benefits, which are:

  • Strategic asset allocation: Making use of the long-term characteristics of financial markets to fulfil your life goals
  • Rebalancing: Regular, disciplined rebalancing to keep the portfolio aligned with your goals.
  • Lower fund costs: Compounded over time, the difference between a low- and high-cost portfolio can have a major impact on returns
  • Maintaining discipline: Investors too often sell when they should buy and buy when they should sell. Advisers can make a critical difference by helping you avoid these mistakes
  • Tax-efficiency: One of our core competencies is using the right vehicles for different assets
  • Retirees: We help ensure that post-retirement spending is undertaken as tax-efficiently as possible
  • Sustaining income: We work to provide you with income without unduly increasing the risk level of the portfolio

Find out more on their website, here > https://www.vanguard.co.uk/professional/adviser-support/advisers-alpha

Related reading

We’ve written about this topic before, and you may like to revisit our related articles:

Lance Baron

Certified Financial Planner (CFP) based in East Sussex, UK. We support people in Southeast England with more than £500K to invest by building a financial plan that will help them live the life they want… until age 100