The pros and cons of using a wealth manager

Should you go solo, trust algorithms or get an adviser?

How serious are you about managing your finances? If you are reading this, then there’s a fair chance you have more than a passing interest in making sure you accumulate rather than squander your wealth.

But there’s a big difference in wanting to do the right thing and knowing how to do the right thing.

To help guide you through that decision-making, Brenthurst has compiled a list of pros and cons comparing going it alone, trusting in algorithms, and speaking to a qualified financial adviser.

DIY investing

This route is advisable only for experienced, sophisticated investors. And even then, taking full charge of your investment planning is not without sizeable risk.

Pros

You make your own decisions based on your own research;

You can select companies or industries you believe offer growth opportunities;

You are free to choose the investments or products you want;

You potentially benefit from lower fees;

You have direct access to investment information and communication.

Cons

Poor decisions due to a lack of insight, especially during times of market volatility;

Decisions based on emotion, especially fear or greed;

Low returns compared with funds managed by a professional;

Limited product choice due to an overload of information or lack of understanding;

Investing or saving in isolation, with no comprehensive plan..

Robo advice

No discussion on investing in the 21st century is complete without debating the merits of algorithms to produce a personalised financial plan. Robo advisers may be promoted as the future of financial advice, but still have a long way to go to live up to that promise.

Pros

Low fees; ý Software that offers a lot of information and options;

Process establishes your wants and needs;

You get to choose which products you want from the suggested options.

Cons

Despite the promise, robo advisers don’t offer personalisation

ý Platforms claim to have all the answers;

ý No face-to-face meetings;

ý Access and services require an internet connection.

Wealth manager

Partnering with a wealth manager is a sure sign that you are serious about managing your financial success.

As you can see from the investor lifecycle graphic, there is no ideal time to start thinking differently about your money: it’s a life-long pursuit and discipline that pays dividends over the long run.

Brenthurst Wealth’s qualified financial advisers can help you craft a financial plan, irrespective of where you are along the investor lifecycle.

Pros

A comprehensive needs analysis is conducted to identify your needs and goals;

A personalised financial plan is created so you can meet your needs and goals;

Deep insight into markets, economies, investment vehicles and tax rules;

Access to tax and estate planning, risk planning, local and international investing;

Professionally accredited financial and wealth advisers;

Legal compliance offers peace of mind;

Personal interaction and knowledge-sharing through investment seminars;

Returns that outperform indiscriminate retail funds.

Cons

The administration and documentation required for full legal compliance;

Higher (but realistic and relevant) fees compared with DIY and robo investing.