It’s no secret here on the Blog that we’re big advocates for professional fee-based financial planning. Based on the articles we read, we believe those who insist on do-it-yourself financial planning are putting their financial futures at risk.
There are plenty of reasons why we’re convinced of the value of professional financial expertise. But this week on the Blog as we focus on financial planning, we wanted to examine the questions raised by the seeming popularity of DIY financial planning. How many Americans actually use a financial advisor, we wondered – and, for those who choose to avoid the professional advice a qualified planner provides, what resources do these do-it-yourselfers actually rely on to make important financial decisions?
Broader Access to Sophisticated Tools Encourages a DIY Approach
Our guide is this online article from the YouGov.com website, prepared by content manager Rishad Dsouza. He examined the data to reveal why Americans often favor DIY planning over professional financial advice, and what they’re using to guide their decisions. As usual, we also wanted to give Rajiv Nagaich and his colleague Saket Sengar the last word on this topic.
Dsouza notes that technology clearly plays a central role in the DIY financial world.
“What began with commission-free trading and mobile investing apps,” he writes, “has evolved into broader access to sophisticated financial products, AI-powered investment tools, fractional shares and, increasingly, private markets that were once reserved for institutions and fund investors.”
About One-Third of Americans Are Using a Financial Advisor
The YouGov article states, “A large share of American investors are making investment decisions without the ongoing help of a financial advisor. [New data] shows that just a third of American investors currently use a financial planner or advisor service (32 percent).” Another one investor in seven say they used to rely on a financial planner but no longer do.
The definition of “investor” is broad, the article explains, referring to U.S. adults who are currently invested in equities/bonds, mutual funds/ETFs, retirement accounts or annuities. Data comes from a recent YouGov survey of nearly 1,300 adult respondents age 18 and older, adjusted for age, race, and gender.
Besides the 32 percent who use a planner and the 14 percent who used to, there’s a group of 22 percent of adults who say they are interested in professional financial planning but have never met with an advisor. Only 28 percent say flat out that they have no interest in working with a professional planner. The remaining few percent had no clear response to the question.
For the DIY Investor, Sources Include Friends, Family, and YouTube
Dsouza’s article then asks the question we had asked: in the absence of financial advisors, how are investors making investment decisions? What sources influence them? He notes that, among DIY investors, “informal and digital sources play a major role in investment research.”
These key sources represent a mixed bag, Dsouza writes. “Friends, family, or colleagues are the most common source of investment information, cited by 35 percent of DIY investors,” he states. “Financial news websites follow at 30 percent, while 22 percent say they use YouTube videos.”
A smaller percentage of the do-it-yourself crowd does seem to rely on actual research: company earnings reports, brokerage sites, and analyst research found online. Online forums and podcasts are cited by about 15 percent of respondents each. (Note that the survey allows for multiple responses.)
Still, it’s telling that one-third of respondents who don’t use a financial advisor will rely instead on recommendations from friends and family members.
DIY Investors Say Portfolios are Too Small for Professional Advice
When YouGov asked respondents why they do not use the services of a professional financial advisor, the biggest reason by far came as something of a surprise to us.
“The leading reason DIY investors give for not using a financial advisor is that they do not think they have enough money invested to need one,” Dsouza notes. “Some 41 percent select this reason, making it the most common barrier by a clear margin.”
We also notice that about one quarter of respondents – 27 percent – doubt whether an advisor provides sufficient value for the costs incurred, which could also reflect the belief that financial planning services are chiefly for the wealthy.
Control and Confidence Also Cited by DIY Investors
Besides questions about the “value proposition” in hiring a financial advisor, another large segment of do-it-yourself respondents cited a rationale that shouldn’t come as a surprise: the desire for control.
“Nearly three in ten DIY investors (29 percent) say they prefer to have direct control over their investments,” the YouGov article reports. A slightly smaller number – 25 percent – say they have the confidence to make financial decisions on their own.
Interestingly, only a small percentage said they flat-out “don’t trust” financial professionals. The issue appears less about trust and more about autonomy, we note.
Even DIY Investors Find Today’s Financial Choices “Overwhelming”
Finally, the YouGov survey asked about attitudes toward investing among those who choose the do-it-yourself route. What stood out here was that even this group say they are overwhelmed by the complexity and the choices in today’s investment landscape.
“There are signs of friction,” says Dsouza. “A clear majority say the number of financial choices available is overwhelming: 21 percent strongly agree and 42 percent agree.” He adds, “This suggests that many DIY investors like learning about investing and want control over their decisions, but the volume of information available can itself become a challenge.”
This would seem to offer an opening for professional financial advisors to act as an information source – and perhaps a filter – for today’s data-saturated do-it-yourself investor.
Our Take: This Article Only Focuses on One Aspect of Financial Planning
When we asked Rajiv Nagaich and Saket Sengar for their response to this data-driven article, their answers were both predictable and insightful.
“It’s disappointing to me that so many people have such a high degree of confidence in their own so-called financial wisdom,” says Rajiv – “disappointing, but not surprising. It’s easier to ask your brother-in-law or your next-door neighbor for advice, even if they have no idea what they’re talking about, than it is to spend the time and money to get the kind of financial guidance that can really help you!”
Rajiv’s colleague Saket Sengar agrees 100 percent. “Look, I’m a certified financial planner, so naturally I have some bias in this question,” Saket states. “But in my view the underlying problem here is that those who insist on a do-it-yourself approach are only looking at one aspect of financial planning: investment growth.”
There’s More to Financial Security Than a Large Portfolio
Saket continues, “If all you want to do is manage your investments and move money around, be my guest. I still think you need professional advice to do it well, and to avoid the kind of confirmation bias that causes you to listen only to sources that agree with you. That is a very dangerous and expensive way of thinking.”
Saket reminds us what’s really at stake. “Rajiv has said it a thousand times on his radio show and in live seminars,” he emphasizes: “having plenty of money is no guarantee of retirement success. I have one question for the financial do-it-yourselfer: is there anyone who will sit down with you, ask you hard questions, and help you do the comprehensive planning that will guarantee a successful retirement? I will bet that, for most of you, the answer is no.”
Rajiv concludes, “So, here’s an invitation for the DIY crowd. Come to a free LifePlanning seminar. Let us talk with you and show you what you’re missing. I can guarantee you you’ll walk away with a different perspective on financial planning than you’ve ever had before!”
Rajiv Nagaich – Your Retirement Planning Coach and Guide
Rajiv Nagaich’s newest program on PBS, called Designing Your Ideal Future, is bringing Rajiv’s powerful message to Americans from coast to coast. This engaging and challenging PBS show is prompting thousands to take a fresh look at the type of planning that will help them succeed in retirement.
In this one-hour PBS special, Rajiv Nagaich takes viewers step-by-step through the principles of creating a retirement plan that truly supports the life you want to live. Instead of generic check-the-box paperwork, Rajiv reveals how to infuse your perspective — your values, goals, and priorities — into every legal document and life plan component so your plan becomes a living system for your future.
Designing Your Ideal Future includes insights from real-world planning examples and a live Q&A with Rajiv Nagaich that answers viewer questions about retirement planning, legal readiness, and family communication. It’s perfect for anyone approaching retirement, currently retired, or responsible for a loved one’s future care — and for those who want a clear, effective approach to planning that prioritizes personal choice and quality of life.
What About You?
You’ve heard Rajiv say it repeatedly: 70 percent of retirement plans will fail. If you know someone whose retirement turned into a nightmare when they were forced into a nursing home, went broke paying for care, or became a burden to their families – and you want to make sure it doesn’t happen to you – then these materials are your key to retirement success.
Visit your local PBS station’s schedule to find airtimes and learn how to access companion resources — including a free Legal Readiness Quiz and tools to help build your complete LifePlanning system.
Don’t remain among the millions of Americans sleepwalking their way into a retirement they never wanted. Instead, your retirement can be the exciting and fulfilling life you’ve always hoped it would be. Start by watching, reading and sharing Rajiv’s important message.
And remember, Age On, everyone!
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