There are generally a couple of criteria people should consider in looking at this issue.
First, do they want or like to manage their investments? There are folks who really have a passion for managing investments. They relish the challenge of researching the different investment opportunities. They monitor the economy and markets looking for those investments that will do well. Then there are people who have no interest whatsoever in anything related to finance and investing. They enjoy other pursuits such as gardening, reading, coaching their children’s sports teams, etc. These individuals, when given a choice, select the default selections offered by their company retirement plans. Even if these choices may not be optimal for them.
The next question is time. Do you have the time to spend monitoring your investments? A general rule of thumb is one hour per month per investment. While this may not seem like a great deal of time, reviewing various holdings of a portfolio can begin to add up. This is especially true given we all have careers, family and social interests.
Another consideration related to the two factors above is the disinterested spouse. In many families one individual handles all the financial affairs while the other takes on other responsibilities or is just not interested. In this case, it may be prudent to at least begin the process of looking for an advisor. By initiating a relationship with a potential advisor, the family is provided a form of insurance or back up in case something happens to the person managing their investments.
Many people believe their account balances are too low or that they do not have “real” money to justify an advisor. As a result and despite the issues mentioned above, they will not engage an advisor.
However, despite the size of the account, or even if one has the inclination and time to manage their investments, it is always a good idea to have a second set of eyes review your accounts. An advisor may add a fresh perspective to what you are trying to accomplish and how to accomplish it.
The content contained herein represents the author's opinion and should not be regarded as investment advice which is provided only to Agnew Capital Management LLC clients upon completion of a written plan.