A recent Allianz study reports that, while 88 percent of Americans say that working with a financial advisor would help them reach their financial goals, including planning for a comfortable retirement, only 44 percent work with a financial advisor. That percentage is down from 48 percent in 2022.

The reasons for this gap between inspiration and execution vary. For example, 23 percent of respondents in the Allianz survey say they don’t discuss certain topics, including longevity and health-care costs, with an advisor because they haven’t prioritized finding a solution.   Other’s don’t feel that the cost of having an advisor is justified when they can try a do it yourself approach.  Other’s feel they can’t afford a professional advisor.

Benefits of Working with a Financial Advisor vs. DIY

In today’s digital age, access to investment information and tools has empowered many people to explore the world of do-it-yourself (DIY) investing. While managing your own investments may seem cost-effective at first glance, it’s essential to consider the potential trade-offs compared to working with a professional financial advisor or planner. Ultimately, while the allure of saving on advisor fees may be enticing, the value that a professional brings, including tax-saving strategies and asset-protection measures, may provide a higher net income to you.

One of the perceived advantages of DIY investing is the potential cost savings associated with bypassing the fees typically charged by financial advisors. With an abundance of online brokerage platforms and investment resources readily available, anyone can access to research, analysis tools and trading platforms and execute investment decisions independently.

However, DIY investing also comes with inherent risks and challenges. Navigating the complexities of financial markets requires a deep understanding of investment principles, risk-management techniques, tax considerations, the ability to stay disciplined amid market volatility and a myriad of other factors.  Individuals often overlook, or are unprepared to manage, income-tax optimization and reduction of internal or “hidden” fees.

Perhaps most significantly, without the guidance of a professional advisor, individuals may be susceptible to emotional decision making, behavioral biases and suboptimal investment strategies that could undermine their long-term financial goals.

According to the National Financial Education Council, a lack of personal finance knowledge costs the average American $1,300 each year. This number increases for those who have substantial wealth.

A  recent Vanguard study found that, on average, a hypothetical $100,000 investment would grow to more than $190k under the care of an advisor over a period of 25 years, whereas the expected value from self-management (DIY) would be $110,000. This hypothetical study assumes a 5 percent net return and a 3 percent net annual value-add for professional financial advice to performance.

Also, the value of working with an advisor goes beyond what you might see in a return on your investments. We don’t know what we don’t know. Advisors can save you money through management of tax issues, estate planning and asset protection.  One seemingly simple mistake or oversight in managing your finances can be extremely costly — and often irreversible.

Our financial advisors have the training, certifications, and experience to advise you on every type of financial topic imaginable.  You will benefit from the combined expertise of our advisors, who have more than 300  years combined  experience.

Wealth Managers vs. Financial Planners or Financial Advisors

While the terms “wealth manager” and “financial planner” or “financial advisor” are sometimes used interchangeably, they represent distinct roles with unique areas of focus, services and expertise. Understanding these differences is crucial for individuals seeking comprehensive financial guidance tailored to their needs and aspirations or those who want to do it on their own.

A wealth manager primarily focuses on the management and growth of an investment portfolio. There is typically no consideration for an individual’s specific tax planning, income, cash needs or other every-day financial issues. A wealth manager is paid to invest the money in a portfolio. Someone who does their own financial planning or investing  may use wealth managers to manage their mutual funds, ETFs or separately managed accounts. The wealth manager is generally compensated with a fee based on the amount of assets he or she is managing for the client.

On the other hand, a financial planner takes a holistic approach, considering all aspects of an individual’s financial life beyond investment management. Financial planners work closely with clients to develop comprehensive strategies that encompass budgeting, retirement planning, tax optimization, risk management, estate planning and more. They serve as strategic partners, helping clients articulate their financial goals and navigate life transitions with confidence.

The primary distinction between wealth managers and financial planners lies in their scope of services and areas of focus. While wealth managers focus on portfolios, they do not provide any tax optimization or personal planning.

One of the hallmarks of financial planning is its holistic nature, emphasizing the interconnectedness of various financial, tax and legal components. Rather than viewing each aspect of an individual’s financial life in isolation, financial planners take a comprehensive approach, recognizing the intricate relationships among income, expenses, investments, insurance, taxes and estate planning.

Carver Financial Services is focused on your personal vision.   By considering the broader context of your overall goals and objectives we can identify opportunities for optimization and risk mitigation across multiple dimensions. This holistic perspective enables us to craft personalized strategies that align with your personal values, priorities and long-term objectives.  While there are hundreds of planning firms in the Unitted States our approach is truly different.  We are focused on your entire life and assisting with everything from finding the best medical care or asset protection.  From providing once in a lifetime experiences to connect our clients with other like minded individuals for companionship,

Comprehensive Advice Is an Invaluable Resource

We understand that 1 percent of a portfolio may be tens of thousands of dollars, and the desire to save this amount can be compelling. However, the value our team provides to you will likely return far more than the cost while also providing you and your family with a resource in terms of both time and money.

By implementing very intentional planning for you ranging from tax-efficient investment strategies, retirement planning techniques, and estate planning considerations we can help you minimize tax liabilities and maximize after-tax returns over time.

Even if you are paying thousands of dollars to work with us, you can still have a higher net return.

Ultimately, the cost of working with a financial advisor is generally 1 percent or less of your portfolio. If an advisor can provide more than 1 percent of value, then you are ahead. Various studies have indicated that a financial advisor can provide 3 percent or more net return. Aside from that, the real value may be in the ability to have the ongoing advice of a professional team with whom you can discuss all financial matters, ranging from estate planning to college funding and asset protection.

Often, the financial returns provided are because of what didn’t happen versus what did. People often look at their portfolio returns but do not see the tax savings, the reduction of internal expenses, the protection from creditors or being able to avoid a catastrophic health expense because of the advisor’s advice and guidance.

Having an advisor provides you with an invaluable resource.

We Are Different

Our firm is very different from most others.   As Bill Graham famously said about The Grateful Dead – “they are not the best at what they do, they are the only ones who do what they do”.    We provide a community and a wide array of resources beyond simply wealth management and financial planning. We are here to assist with all aspects of your life, not just the financial aspect. We provide comprehensive financial guidance while offering live events, client trips in worldwide locations, a monthly blog, videos and a host of other resources.

Investments, portfolios and financial planning are simply a means to an end for us, with the “end” being your ability to lead your best life possible with the least amount of stress.

Our Personal Vision Planning® process encompasses all aspects of your life ranging from planning your text trip, protecting your assets, to finding the best medical care just to name a few. We can identify opportunities for optimization, address potential blind spots and help you navigate life’s financial complexities with confidence and peace of mind.

There is neither a cost nor any obligation to connect and see if you are a good candidate for what we do, and if we are a good fit for you.  If nothing else we can provide a second opinion.  Please reach out whenever we may be of service.  We look forward to hearing from you.

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Randy Carver, CRPC^®, CDFA^®, is the president and founder of Carver Financial Services, Inc., and is also a registered principal with Raymond James Financial Services, Inc. Carver Financial Services, Inc., was established in 1990 with the vision of making people’s lives better — clients, team and community. With this mission, Carver Financial Services has grown to be one of the largest independent financial services offices in the country, managing $2.6 billion in assets for clients globally, as of March 2024. You can reach Randy directly at randy.carver@raymondjames.com and in the office at (440) 974-0808.

Any opinions are those of Randy Carver and not necessarily those of Raymond James. This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete.