on August 5, 2025
As a financial advisor, you may be surprised to hear me say that not everyone needs to hire a professional financial planner. In some instances, individuals (especially those with straightforward circumstances and fewer assets) can manage their finances on their own. However, even if a person is somewhat financially savvy and has a relatively uncomplicated situation, there is still one crucial reason to hire a financial advisor: to gain access to a constant voice of reason.
Why Individual Investors Require Reason
Far too often, I have learned about individual investors making poor decisions when they’re in panic mode. They see the stock market dip, they hear a dire prediction on the news, and they decide to sell everything to get ahead of the certain impending catastrophe. Then, the catastrophe inevitably doesn’t happen, the market bounces back, and the panicked individual is forced to buy back in at a loss.
It’s a common story that has occurred innumerable times over the last few decades. The subprime mortgage crisis in 2008, or the fear drummed up by the COVID pandemic, or the uncertainty associated with Trump’s recent tariffs—in all these instances, the market was turbulent and those who were less level-headed panicked and made sweeping changes to their individual portfolios or pulled their money from the stock market entirely.
The irony is that those who pay attention the most may also be the most tempted to act irrationally. If you’re constantly watching the ups and downs of the market all day, you might have moments of sheer terror as you watch your investments plummet. Though historical evidence tells us these losses are temporary (especially when someone is invested broadly and diversely), the fear is still tangible and may cause otherwise sensible people to make irrational decisions.
How Financial Advisors Can Help
Some days, it feels like a large part of my job is being a therapist, a historian, and a voice of reason all at once. I often need to talk people out of making rash decisions, explain why things will likely be okay, and discuss the road ahead in a logical and approachable manner. Occasionally, I have prevented people from taking extreme actions that would have derailed their investment plans and goals.
Additionally, if an individual investor works with a trustworthy and competent financial advisor, they are likely well prepared to weather any temporary lulls or storms in the financial world. They will have a robust, diversified, and logical portfolio that can carry them through the “bad weather” and into the sunny days ahead. By and large, my clients trust that we have put in the leg work to ensure their portfolios are resilient and sustainable. Plus, we revisit them regularly to ensure they still suit the client and their situation.
This is why many people benefit, or would benefit, from hiring a financial advisor. Many investors follow their emotions at inopportune times, even when logic tells them to stop. In order to curtail poor decisions and successfully get through turbulence or bear markets, it pays to have a voice of reason to guide you. It pays to hire a trusted financial advisor.