Why You Definitely DON'T Need a Financial Advisor to Budget, Save, and Invest

We’ve all seen the headlines suggesting that once you hit a certain age or income level, you need a professional to take the wheel of your financial life. But according to Alex Mahoney of Kota Financial Coaching, the industry often makes personal finance sound far more complicated than it actually is to justify high fees.

Here’s why you might be better off as a DIY investor or working with a financial coach instead of a traditional advisor.

1. It’s Never Been Easier to DIY

The Wall Street Journal recently pointed out that technological aids—budgeting apps like Monarch Money, financial calculators, and robo-advisors—have made DIY investing more accessible than ever [00:52]. Alex notes that if you can learn the basics, these tools can do much of the heavy lifting that advisors used to charge thousands for.

2. The "1% Fee" is a Retirement Killer

The traditional advisor model often charges 1% of your managed assets. On a $500,000 portfolio, that’s $5,000 every single year [04:17]. Over decades, the lost compounding interest on those fees can cost you hundreds of thousands of dollars. Alex asks: why not pay for a few hours of education once, rather than letting an advisor "rake in fees and laugh all the way to the bank" year after year? [04:59].

3. Major Life Events Aren't Always "Complex"

Advisors often claim you need them when you get married, have a child, or approach retirement. Alex argues these are mostly budgeting shifts, not portfolio shifts [01:47].

• Having a kid? You just need to budget more for savings.

• Getting married? Your tax situation might change, but your core investments likely shouldn't. Unless you have an extremely complex situation—like owning a large corporation or managing a massive inheritance—these milestones are manageable with a solid plan and a one-time consultation [02:44].

4. Index Funds vs. Over-Complication

A common tactic in the industry is to "muddle the issue" with a confusing array of investment vehicles. In reality, most people only need low-fee index funds or target-date funds to meet their goals [05:39]. You don't need a year-over-year advisor to tell you to stay diversified; that’s a skill you can learn once and apply for a lifetime [07:45].

5. Planning for the "Smile Curve"

When it comes to retirement, Alex addresses the "Smile Curve" of spending: you spend more when you're young and active, less as you slow down, and more again at the end of life for medical care [09:53]. While this requires planning, it doesn't require handing over 1% of your net worth annually. Tools and one-time consultations with a CPA or a financial coach can help you map this out without the ongoing "management" tax [10:40].

The Bottom Line: Learn to Fish

Alex’s philosophy is simple: Hire someone to teach you how to fish, don’t hire someone to fish for you forever.

If you are a middle-class saver with a straightforward income, you likely don't need an ongoing financial advisor. Between a smart financial coach for the "how-to" and a CPA for the tax specifics, you can keep more of your hard-earned money in your pocket [15:05].

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