In the advice-only financial planning sphere we often use the term “DIYers” to describe those clients who have a certain comfort level with their finances. These people often don’t feel it’s necessary to hire a financial professional for a robust menu of services. In particular the distinguishing factor between DIYers and those that prefer a hands-off approach to their finances is the financial zone of investments.
DIYers are likely more comfortable opening investment accounts, depositing money, buying their chosen securities and monitoring the performance of their investments. Those with a hands-off approach prefer not to do any of this and seek out investment advisors to do it for them. Neither are right or wrong, good or bad. It’s just a preference. Knowing your preferences can go a long way in helping you select the right financial professional to hire (if you want one at all)!.
On a scale from 1-10, imagine 1 being “not at all – I’d rather hire someone to manage my investments and monitor my overall plan” and 10 being “complete DIYer – I feel completely comfortable managing my own investments and creating and updating a plan as necessary”.
If you’re a 1 or a 10, you’re probably not reading this blog anyway. So, let’s explore what the other numbers might mean for you. Most people fall somewhere in the gray zone of this scale. This isn’t an exact science, rather a framework to help you think through how you’d like to approach your personal finances and what type, if any, of a financial professional would be best for you.
Mid-Way on the scale: The 5 marks the start of the hybrid-DIYer zone
Let’s start with the number 5. This mid-point gives us an anchor point to understand the zones both above and below it. I see 5 as the beginning of the range 6 thru 9 that describes someone who is a hybrid-DIYer, and the end of the 2-4 zone that describes the “aspiring DIYer”. At a 5 this person feels comfortable enough to be guided through their finances and understand financial speak “just enough” to feel confident in their abilities to grow. Where they don’t feel comfortable, they are first able to acknowledge that and decide they want the advice of a financial professional who is willing to teach, guide and coach them to increase confidence and competence.
As you progress from 6 thru 9 you are increasingly confident and competent in your abilities to manage your finances, investments and otherwise. Folks in this zone (5-9) who hire a financial planner often fit best with an advice-only planner. But so do the people in the zone of 4-5 … and often they are the silent middle who get overlooked! You don’t need a ton of assets, financial know-how or time on your side to deserve quality financial advice. You just need the desire to learn and move forward.
Now that we have a mid-point anchor, let’s step back to the beginning of the scale let’s explore the range of 2-4 on our scale of 1-10.
If you fall in the range of 2 – 4 you may be in the zone of “Aspiring Hybrid-DIYer” … you are learning more about personal finance so that you can become a hybrid DIYer.
These phrases/questions might fit for you:
- I don’t yet have a lot of assets, and I feel a little (or more than a little) embarrassed about my finances – is there anyone who will start from this point?
- I’m not sure where to start with personal finance, but I’m curious to learn more
- I could probably use some guidance, but I wouldn’t know who to ask for help.
- How would I begin to think about an investment philosophy?
- I’ve asked for help from financial advisors who charge based on assets under management (AUM) but I don’t reach their minimums so I couldn’t gain access to the advice I know I need.
- I’ve read enough and listened to enough podcasts to know that:
- Given enough guidance and coaching, I could manage finances on my own. I just need a starting point!
- I don’t want to go this alone – someone please help guide and teach me!
- There’s so much to learn – who can show me what to focus on?
- I don’t have the time to learn this on my own – I want a guide.
To be successful in working with a financial planner in this zone you will be willing and able to …
- Dedicate the time necessary to learn the basics of personal finance
- Pay for the services that will help you build the muscles of discipline and know-how to reach our goals
- Move outside your comfort zone, even if just a little bit, to learn something new about money and yourself!
- Be patient with yourself (and your family) as you try some new things
Finally, let’s explore the range of 6-9 on our scale of 1-10.
If you fall in the range of 6-9 you may be fully in the zone of “Hybrid DIYer” … of tightening up your personal finance philosophy by gaining the opinion of an advice-only financial planner on your plan. You’re open to suggestions and would feel better knowing you’ve had an objective opinion.
These phrases might fit for you:
- I know quite a bit about my finances, but I would still really appreciate the support, guidance and coaching of an advice-only planner
- I’ve spent quite a bit of time learning about personal finance and feel pretty confident in my abilities to select the basic ETFs or Mutual Funds that comprise my portfolio.
- I don’t invest in anything complicated. I understand that investing is for the long-term and my philosophy is to buy and hold in index funds
- I’m curious to know what alternative courses of action a financial professional might advise for me – am I missing anything?
- I am confident in my abilities and I want a dedicated coach and thinking partner along my financial journey
To be successful in working with a financial planner in this zone you will be willing and able to …
- Dedicate the time necessary to monitoring your financial plan, to include your investment accounts
- Pay someone to review the hard work you’ve already done … and be coachable and open to suggestions
- Stay the course when things get off kilter … if the market tanks, you aren’t going to sell everything and sit on the sidelines.
- Be open and patient with yourself (and also collaborative with your family if applicable) as you take responsibility for the financial path you’re designing
If you find yourself falling somewhere on the hybrid-DIYer scale and you’re ready to engage in advice-only financial planning, use the link on my website to schedule your initial consultation!
