The Rise of the DIY Advisor

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DIY Advisor?

I came across an interesting article the other day, Why I Don’t Use a Financial Advisor, on a site called In it, the author basically got into the technicalities of how he manages his money, and why he chooses to do it himself. He had specific goals, albeit fairly conservative ones (for his savings to earn returns of at least 3%), and detailed how he achieves them without the aid of an advisor. He’s a DIYer, as I assume many on are, and probably a pretty intelligent fellow who’s adept at understanding complex systems and interested in learning new skills. That sounds bad, right? Well, it’s not really, because, A, Jim Wang is probably not representative of the majority of those who could potentially need financial advice, and, B, if you can prove yourself to a guy like Jim and earn him as a client, then you’ve opened yourself up to a whole new client-base.

As you know, I’m a big fan of Lifehacker and DIY culture, myself. For me, as I imagine it is for many other DIYers, which projects I choose take on comes down to a simple value judgement: How much time/money/resources will I spend on the project, how many new skills/systems will I have to learn, how will this project help me long-term, and how much will I actually enjoy doing the thing itself? Another big thing about DIYers is that they take on projects that make sense for them, given the skills that they already have. My point is that, advisors–here comes the analogies–like mechanics or personal trainers, aren’t necessary for some to achieve their goals, but can be VERY useful (on the verge of necessary) for others to achieve theirs. It just depends on the type of person.

Advisor Analogies and Insight

The final segment of the article in question follows:

I don’t hate financial advisers

I actually think financial advisers are great because they can help people, who otherwise have no ability to do so on their own, get on financial track. Financial advisers are a lot like personal trainers. You can get fit without a trainer but your likelihood of success goes up significantly if you work with a professional. The cost is in the fee and if you get a good trainer or adviser, it’s totally worth it.

Another analogy that works well is this – everyone should know how to change the oil in their car (and replace a flat tire with their spare!). That doesn’t mean everyone needs to change their oil every time, sometimes it makes sense to take it someplace to get it done because they’re faster, they handle cleanup and disposal, and it’s a better use of your time. But knowing how to change your own oil is crucial.

These two analogies are extremely interesting. The first, of advisor as personal trainer, is interesting because it’s purpose is to demonstrate probability of success, as opposed to the second, of advisor as mechanic, which is used to demonstrate the value of the client’s basic understanding of a more complicated system in their relationship with the professional. My opinion is that both of these analogies are useful, and accurate, to an extent. After a few big-shop advisor horror stories unravel in the comments, an advisor pipes up, kind of reconciling the two points that the mechanic/trainer analogies demonstrate but without the symbolism:

 I consider my role to be that of both facilitator and accelerator to those who work with me. I can help people get better results in faster and easier ways than they can generally do so on their own. I can also make people aware of potential pitfalls that they may not be cognizant of now or may not be doing anything to avoid in the future.

With the advisor-bashers and advisor-defenders still going at it in the comments, I found it interesting that there was no mention of independent advisors… But, alas, the comments continue, several getting into the generational mores that necessitate/eliminate the need for financial advisors (young people more tech savvy, don’t need advisors; older people less so, do need advisors). Then this comment, from Scott, gets a final word in:

I agree with pretty much all of this. And by pretty much all of this, I mean all of this. Even the comments. Financial advisors are great for people that don’t have the knowledge, discipline, or time to figure out basic investing on their own, but for those of us who have a vision, discipline, commitment, and a little time, they just don’t seem worth it (at least not yet in my current situation).

I want a financial advisor to teach me something I don’t know. That’s worth my time and money with them. But if they are just going to regurgitate some standard statements of advice I could find on my own, then what’s the point? Bottom line – you’ve got to prove, without a doubt, that you’re smarter than me when it comes to financial matters. Then I’m all yours, hook, line, and sinker.

The beauty of this candid statement (Scott probably never thought his comment would be quoted on a blog for independent advisors) is that it really gives you insight into the mind of what we can assume to be an intelligent, average person with some money to manage. What this says to me is what I’ve been saying to you all along: You’ve got to exceed expectations, go above and beyond. But what you do with this information and insight is up to you. Make it count.

DJ is a freelance writer, hopeful photographer, and social media has-been. He writes to financial advisors about lifehacks, science, technology, business and marketing for Blueleaf, a software that helps create dramatically simpler, more scalable financial advisory businesses. You can find DJ across the web ( or you can just follow him on Twitter (@djswitz)!
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