If you are reading this expecting a sneak peek into the latest sci-fi thriller, you may be disappointed; instead, we’re going to touch on something a little more interesting- the new age of investing.

Within the last several years, we’ve begun to see investments and fintechs trending. So, perhaps it's time to take a look at three common investment methods to see which one may be best-suited for you.

DIY (Do-it yourself)

A DIY investor creates their own financial plan and selects their own investment options. Typically, using an online-trading platform.

Pros: 

Low fees- Since you’re doing everything yourself, you may be able to avoid paying management expense ratios (MERs) that usually come along with using a professional.

Since you’re the one in the driver’s seat, you can do as you please with your investments. You’ll also pay closer attention to your finances because you have to.

Cons: 

Control- By taking this route, you won’t be getting any professional advice. If you need product information or market forecasts, you’ll have to find it out yourself.

You are doing your own planning, so you will need to dedicate more time to researching products, following the markets and conducting all of your financial transactions.

Robo-Advisors

A robo-advisor is an automated investment platform uniting technology and banking to build you a portfolio based on your goals and risk tolerance.

Pros:

Simplicity- Most robo-advisor platforms have fairly simple algorithms that will calculate a plan for you based on your answers to a few basic questions.

Minimal Time Investment- Robo-advisors are a passive investment strategy, meaning that once your initial steps are finished, it will run automatically with very little need for monitoring.

Cons:

Lack of flexibility- There is a lack of flexibility when using a robo-advisor. Once you input your personal needs and information, the solution you will be getting is very cookie-cutter and not necessarily taking into consideration other factors in your life.

No guarantees- Don’t let the slick marketing fool you, robo-advisors are just as exposed to risk as any of the other options listed here.

Financial Advisor

A traditional financial advisor is a trained expert who works at a financial intuition (i.e. credit union, bank or investment company). You would typically meet with an advisor face-to-face to discuss your full financial picture.

Pros:

Holistic approach- Advisors will take a look at your full financial picture, including investments, insurance, taxes and estate planning.

Expertise- With an advisor, you’re dealing with someone who has lived through the ups and downs of markets, can help with the emotional side of wealth management and who has a good pulse on what is happening in the news. They are also a great source if you need more information on a type of investment.

Cons:

Fees- Depending on your investments, the fees may be higher when working with a traditional financial advisor.

The wrong advisor- Sometimes you may be working with someone who is just not a good fit. If you are feeling pressured into buying a product that you don’t actually need, that is a huge red flag. So if you think you are experiencing high-pressure sales tactics– it’s time to look elsewhere.

The best solution for you will depend on your financial situation and the level of involvement you want to have in the management of your finances. 

Make sure to do your research and keep in mind that many financial institutions will have variations of the three investing methods that we’ve listed here.

Jay Christensen is a Wealth Planning Specialist with Valley First, a division of First West Credit Union. Connect with Jay at  jchristensen@valleyfirst.com