Do you need a planner if you’re a DIY investor?

I believe that to truly safeguard your long-term financial well-being, Canadian investors must look beyond short-term control and recognize the value of a planner—particularly for retirement planning.

Do-it-yourself investing: Is it better?

Many Canadian DIY investors take pride in being able to manage their portfolios, believing that lower account costs and direct control mean better results. However, in practice, DIYers may overlook crucial risk factors:

• Making decisions based on emotions, 
• lack of diversification in their portfolio and
• failure to adapt asset allocation to the complex and ever-evolving economy.

Volatile markets, like what’s happening now with a low Canadian dollar and the U.S. trade war, mean that decisions can become stressful and emotional, which can often override a long-term planning strategy for those managing their own investments. With inflation, policy shifts and geopolitical tensions, these times demand the experience and foresight that many DIYers don’t have. 

I often get requests from Canadians asking me to look at their DIY plans. But my advice is always the same: Without the disciplined approach from an independent financial planner, it’s too easy to misstep, particularly when managing a transition into retirement. Relinquishing some control and partnering with a qualified financial planner is not a sign of weakness. It is a strategic decision to help ensure that your retirement years are not left to chance. 

Can you save money managing your own investments? 

Another common misconception among DIY investors is that self-management eliminates unnecessary fees. While it is true that investment products, like mutual funds and exchange-traded funds (ETFs), can come at a relatively low cost, there are still fees. Some are visible, some are hidden. For example, mutual funds often carry management expense ratios (MERs) ranging from 1% to 2.5%, and ETFs may offer MERs between 0.05% to 0.75%, but they also include hidden costs, like bid-ask spreads, foreign exchange charges and poorly timed trades.

Unfortunately, though, there’s also the greatest cost of all: missed opportunities. Without professional guidance, many DIY investors in Canada fail to structure their portfolios in a way that supports sustainability through retirement, maximizes tax efficiency and works for the long term.

A good independent financial planner can team up with a portfolio manager to create customized, cost-efficient portfolios, and together work toward a client’s pre- and post-retirement goals. They can tailor a strategy to an individual’s life stage, goals and risk tolerance. It’s not always about the fleeting market trends. The cost of hiring a financial planner, in many cases, can be much lower than what the investors are already paying. I’ve seen it first-hand.

What a planner really does

Qualified advisors do more than stock picking; they offer wealth management. We take a nuanced approach to planning that aligns assets directly with life goals—most critically, your strategy for retirement.

1. Retirement planning: Canadian DIY investors often focus on saving, but they lack a strategy for converting assets into reliable income. Financial planners can help clients plan withdrawal schedules and integrate pensions and government benefits such as Old Age Security (OAS) payments. And they can help clients to plan for both expected and unforeseen retirement expenses.
2. Tax efficiency: Structuring your investments and withdrawals to minimize tax can add years to your retirement income. Strategies such as tax-loss harvesting, income splitting and asset location are often overlooked by self-managed investors in Canada. For example, how are you using a registered retirement savings plan (RRSP) versus a tax-free savings account (TFSA) versus non-registered accounts?
3. Estate planning: You need more than a will. Working with professionals ensures you have beneficiary designations, trusts and tax-efficient strategies—areas DIY investors often neglect.
4. Continuity: In many cases, one spouse acts alone as the DIY investor. When that spouse becomes ill or passes away, the surviving spouse is left to fend for him/herself, often leaving them extremely vulnerable and highly stressed.

This is where the significant difference between DIY investing and professional wealth management can be seen. A financial planner has the ability to bring the structure and depth that are required when making your vision for retirement an attainable reality.

Why you need a planner now

With the current economy, the DIY approach could be precarious. Inflation continues to apply pressure on mortgage affordability the cost of living, interest rates remain volatile, and global uncertainty is impacting markets. Even a carefully crafted DIY plan can lack the adaptability to respond without emotions to these changing conditions.

Times like now mean expert advice goes from a nice-to-have to a necessity. The financial planner is there at every step to recalibrate your strategy, ensure that you remain on track to reach your goals, and provide peace of mind—even when markets do everything but cooperate.

Do you need a financial planner to plan for retirement?

Yes. Retirement is too important to leave it to guesswork.

Investing, though crucial, is just one part of the planning equation. A successful retirement plan requires coordination across taxes, portfolio design, income strategy, and estate and wealth transfer. At Halton Wealth Management, we partner with our clients to provide the comprehensive and expert-driven support that allows you to navigate uncertainty and build a future that reflects your vision and goals.

If you’re a DIY investor feeling the weight of today’s stresses, it’s time to reassess. Relinquishing some control of your plan isn’t about giving up independence. Instead, it means gaining a professional you trust and who is committed to helping you actualize your vision for retirement. 

If you want to talk about your retirement planning, reach out to me anytime at Halton Wealth Management. To find out more about me, read my MoneySense profile, too: James P. Gunn, financial advisor.

Read more about financial planning:

• How a financial planner can help through the life stages
• What it’s like to work with a financial planner
• What type of financial planner do you need?

About James P. Gunn, CEA,CFP, RRC

James P. Gunn has been a financial advisor for over 25 years. He is the president of the independent wealth management firm Halton Wealth Management in Burlington, Ontario.

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