The value of professional advice: Benefits of having a financial advisor on your side 

Editor’s note: The perspectives expressed in this commentary are the author’s alone. The following is a paid thought leadership piece from The Plaza Group at Morgan Stanley in Leawood, Kansas.

In today’s complex and volatile markets, making sound investment and financial decisions is a challenge. Investing on your own can be complicated, overwhelming and risky. In fact, studies have shown that self directed investors can often be their own worst enemies, entering and exiting the market at inopportune times in reaction to market movements that make them uncomfortable or emotional.

Steps to Successful Investment 

Successful investing involves fortitude and a focus on the long term. The first steps you can take toward minimizing the likelihood of costly mistakes are: 

1. Understanding the emotional and behavioral factors that contribute to investor pitfalls
   Psychology influences the choices investors make, such as how often they trade and how they make buy-sell decisions. Common psychological blind spots include:

• • Overconfidence — assuming you know more than you do.
  • Mental accounting — consciously or unconsciously dividing your wealth into separate buckets. 
  • Anchoring — fixating on past prices, such as what you paid for a particular stock.
  • Loss aversion — putting more emphasis on avoiding losses. 

2. Defining your goals and developing a plan—and an asset allocation—that helps you reach them
   Having a plan and sticking to it can help you avoid making emotional decisions.
3. Having the discipline to stay the course as markets fluctuate
   Some investors try to time the market by moving in and out of it. Professional advice can help keep you focused by taking emotions out of the equation.

Your Financial Life is More Than Just Your Investments 

The Plaza Group at Morgan Stanley: David Salach, Teri Salach, Sheila K. Davis, and Jennifer Denning; photo courtesy of The Plaza Group

Over the past few years, the proliferation of robo-advisors that provide digital financial advice based on algorithms has received significant buzz. While robo advice offers a low-cost entry into investing, it also comes with little to no human intervention, Instead, an asset allocation is generated from an investor’s answers to an online questionnaire. But, how you value money — and what you believe about money — cannot be captured or solved by mathematical rules or algorithms. You want advice that connects with your thinking, experiences and beliefs around money. 

If you’re deciding among traditional Financial Advisors or robo-advisors, consider the following: 

• What is most important to you at this stage of your financial life?
• How confident are you in your financial knowledge? 
• Are you able to take emotions out of your financial decision-making? 
• What are the financial complexities that you currently face? 

If there are complexities in your financial life — debt, children, employee benefits, major life events, estate and tax issues — you may want to consider choosing a traditional Financial Advisor who can help you customize a plan that is tailored to your specific situation. And, keep in mind that reaching your goals often involves going beyond investment advice to include conversations about estate and wealth transfer planning, risk management and even your philanthropic aspirations. 

By working with an experienced Financial Advisor, you can have the best of both worlds — the freedom to make your own investment and financial choices, but with the guidance of a professional who understands your unique needs, improving your chances of achieving your goals.

Disclosures: 

Article by Morgan Stanley and provided courtesy of Morgan Stanley Financial Advisor. 

The Plaza Group at Morgan Stanley is comprised of Teri L. Salach, CIMA®, CWS®, Wealth Advisor, Sheila K. Davis, CFP®, Financial Advisor, Jennifer L. Denning, CFP®, Financial Advisor, and David M. Salach, Financial Advisor, in Leawood, KS at Morgan Stanley Smith Barney LLC (“Morgan Stanley”). They can be reached by email at Jen.Denning@morganstanley.com or by telephone at (913) 402-5264. Their website is 

http://advisor.morganstanley.com/theplazagroupkc. 

This article has been prepared for informational purposes only. The information and data in the article has been obtained from sources outside of Morgan Stanley. Morgan Stanley makes no representations or guarantees as to the accuracy or completeness of information or data from sources outside of Morgan Stanley. It does not provide individually tailored investment advice and has been prepared without regard to the individual financial circumstances and objectives of persons who receive it. The strategies and/or investments discussed in this article may not be suitable for all investors. Morgan Stanley recommends that investors independently evaluate particular investments and strategies, and encourages investors to seek the advice of a Financial Advisor. The appropriateness of a particular investment or strategy will depend on an investor’s individual circumstances and objectives. 

Morgan Stanley Smith Barney LLC (“Morgan Stanley”), its affiliates and Morgan Stanley Financial Advisors and Private Wealth Advisors do not provide tax or legal advice. Clients should consult their tax advisor for matters involving taxation and tax planning and their attorney for matters involving trust and estate planning, charitable giving, philanthropic planning and other legal matters. 

Asset Allocation does not assure a profit or protect against loss in declining financial markets. 

The Plaza Group at Morgan Stanley may only transact business, follow-up with individualized responses, or render personalized investment advice for compensation, in states where they are registered or excluded or exempted from registration, http://advisor.morganstanley.com/theplazagroupkc. 

Asset Allocation does not assure a profit or protect against loss in declining financial markets. 

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