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DIY or get a Financial Advisor?

June 17, 2024
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Paul Roux
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Paul Roux

In this article, I unpack each method to help you make an informed decision.

The world of investing has witnessed hundreds of strategies throughout the ages. In essence, we are all trying to gain an edge, and if you can devise a strategy that outperforms the market, you can continue to leverage it until it no longer produces alpha. However, there are only three options to execute such a strategy: going the DIY route, seeking assistance from a financial advisor, or a combination of both. In this article, I unpack each method to help you can make an informed decision. 

 

DIY Investing

DIY investing involves conducting research, creating, and managing your own investment portfolio using platforms like EasyEquities and PSG Online. FinMeUp helps facilitate DIY investing by offering a wealth of educational content, stock insights, and research on both South African and foreign markets through our app.

My opinion: Actively picking and managing individual stocks can be a daunting task, and history shows that active investing often underperforms passive investing. Even professional fund managers struggle to beat the market, with only two out of ten managing to do so. With active investing, you can potentially strike gold with stocks like 2022 Renergen, Santova, and Thungela. However, the downside is that you are also exposed to losers like 2022 Meta, Spotify, and Bitcoin. The bottom line is, while there is potential for significant gains, there is also a high risk of underperforming the market.


Financial Advisor

Using a financial advisor means that you have a professional money manager that invests on your behalf. As a FinMeUp financial advisor, my aim is to help clients achieve their financial goals by offering expert guidance and personalized advice. If you lack the time or knowledge to manage your own investments, seeking the assistance of a financial advisor will be invaluable.

My opinion: I believe that everyone can benefit from having a financial advisor, or at the very least a financial consultant.  The problem with advisors is that they might overcharge, underdeliver, or both. While I suggest considering a financial advisor, it's essential to ensure that you and your advisor are on the same page and that they have your best interests at heart.

 

Hybrid Model

By adopting the "core and explore" approach, a financial advisor assumes control over the majority of your investments (the core), while giving you the freedom to experiment and potentially earn big on your own (explore). 

My opinion: This strategy is ideal for investors who enjoy trading on EasyEquities, but lack the time or expertise to manage their investments full-time. Personally, I have found this to be the best strategy for me, as it allows me to have the security of safe investments, while still having direct exposure to individual stocks such as Santova, Pan African Resources, and Mondi PLC.

 

In conclusion, you now have three options to choose from, each with the necessary tools and links to help you make an informed decision. FinMeUp is committed to supporting you throughout your investment journey, regardless of which option you choose. So go ahead and make the most of it!

 


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