I’m in my 30s. Should I pay for financial advice, or do it myself?

My wife and I are in our mid-30s. We don’t have children. We have some savings, and one investment property. Beyond saving, we haven’t done much with our finances, and I’m thinking now is a good time to start. When is it worth hiring a financial advisor?

Let’s think about this on a spectrum from “fully outsourced” to “fully doing-it-yourself (DIY)”. Everyone sits somewhere on this spectrum – either you’re outsourcing everything, or you are doing everything yourself. Neither extreme is ideal – but where you sit on that spectrum will be an individual choice.

As a general rule of thumb – if you have less than $100,000 in total assets (meaning you add up your savings, investments, and superannuation – and no, your car or other possessions are not assets in this context), I don’t recommend hiring a financial advisor as a starting point.

At this stage, the cost of advice (which can range from $5000 – $15000+ for a full plan) can feel hard to stomach. Much of the value they can add at this stage are things you can learn yourself with a little effort, at a fraction of the fees.

More importantly, there are things financial advisors aren’t well suited to helping you with. If you don’t have a basic understanding of investing and end-up panic-selling when there’s a market downturn; if you have superannuation but don’t understand the value in it so you never prioritise it – no financial plan will help.

So, doing some of the initial work yourself will serve you well long-term because it does the most important thing no-one else can do for you – it gets you meaningfully engaged with your own finances.

What if you have more than $100,000 in assets? I’m going to give you some questions to reflect on, that will help you determine if/when working with an advisor could be a good move.

What specifically do you need an advisor for?

If you’re in the category of: “I don’t understand my own finances, and I just want someone to fix it for me” – you may not be ready to work with an advisor. Hiring an advisor at this stage can create an unhealthy power dynamic. You would have to blindly follow their advice – and that’s not a good position to be in.

Ideally, you want some clarity on what you want an advisor to help you with, before you walk into their office. Do you need them to create and manage an investment plan for you? Do you need them to review and optimise your superannuation for you? If you know what you need – and don’t need – you’re going to have more agency in that conversation.

The more complicated your situation gets, the more it can be valuable to start building a ‘financial team’ who can support you.

How complex is your financial situation?

If your situation is pretty simple – you and your wife have a few standard sources of income (a job, some side-hustles or self-employment), some superannuation, a property or two – you may not need a financial advisor.

I’ve seen plenty of people in these situations successfully learn to DIY their finances – with maybe just an accountant to help support them with tax planning. If you have a fairly simple strategy – optimise and max out your super, create a low-maintenance investment portfolio, and buy a home – you can learn to do that on your own, even as a total beginner.

Yes, it takes more time and effort on your part, but it also saves you a lot of money in advice fees, and gives you more control and ownership over your finances long-term.

However, the more complicated your situation gets – maybe you have multiple entities (companies, trusts, SMSFs) – the more it can be valuable to start building a financial team who can support you in managing your affairs e.g. an accountant, financial advisor, lawyer, etc.

What’s the goal?

Sometimes, people hire professionals for anxiety-relief. There is a certain anxiety that builds up when your finances have been unattended. Hiring an advisor may “get the job done”, which can be a relief. But it may not give you financial confidence or ownership long-term. You may not get the clarity or understanding about your finances that you hoped for.

This is the bit most people don’t think about – what is the relationship you want with your own finances? Fast forward a few years, do you still want to feel like it’s a bit of a black-box that you don’t understand, but someone else is taking care of it, so hopefully it’s okay? Or do you want to feel like you have clarity and confidence in how you’re managing your own wealth?

So, instead of asking, “what’s going to get the job done?” I encourage you to start asking, “what’s going to help me manage my wealth and finances with confidence, long-term?”

Paridhi Jain is a money and mindset coach who combines practical strategies with mindset transformation to help clients create more freedom and fulfilment in wealth, work and life. Find Paridhi at: skilledsmart.com.au

• Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.

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