Investing on your own can save a bundle and give you a ton of satisfaction if your funds take off. But if you can’t fathom ever-losing money, get a financial planner.
One of the first questions investors ask is this: Should I invest on my own or get the help of a financial planner?
For many investors, the answer is an obvious one. If you have a lumpsum to invest and have no knowledge of the markets, you need help. But what about the rest of us? We know a little bit. We are willing to learn more. We are intrigued by the idea of investing. But will we do a good job?
Like all things that surround us, pros and cons are also associated with “doing your own investing”. Lets start with the pros.

1. You save money that you’ll have to pay as fees. Fee of a financial adviser depends on his policies for charging clients. It could be a lot. But you might pay even more if you choose funds with high annual fees and back-end loads. Can you afford to make such mistakes with your hard earned money and still come out ahead?
2. You could get the same performance. A portfolio or the investment plan probably could give the same results as a good fund. However, this holds true only for debt investment. Equity portfolio would require much more diversification to give above average returns.
3. Investing can be satisfying. Here I think of Mr Sharma, a frequent investor. I think he truly loves to learn about investing. He asks questions, checks himself and compares one investment to another and takes his own decisions. He does his own investment planning and is prepared to take the the risks and rewards associated with it.
4. You can manage and control taxes better, if you know the intricacies of the tax laws. For instance, if you manage your own portfolio, you can offset capital gains with capital losses.
5. Be adventurous to get higher returns. This could be possible if you take on a risk profile that an investment planner would never set up for you. For example, suppose you say to an adviser: “I want to buy five instruments that will double in four years. Please find the five fastest-growing funds, buy them and monitor them for me, keeping my money always in the top five.” A planner would say: “That’s not what we suggest for you as it does not match your risk profile.” But you could try that yourself. When you manage your own money, you can take as much risk as you like, recognizing, of course, that you could lose as big.

Now five cons to doing-it-yourself:

1. You don’t know how to design a portfolio. When financial planners — the best of them — design portfolios, they talk about the “financial plan,” or ideal risk-return profiling for each individual. In other words, there is a portfolio that most efficiently matches your level of risk. A person with a high level of risk would have a different “financial plan” than a person who can’t face the idea of losing money — even for a few days in exchange for the possibility of higher returns in the long run. A portfolio design is made after taking into account a host of permutations and combinations. And that is why it is not the work for a novice. In his investment classic, Asset Allocation, Roger Gibson, an eminent writer on the topic, says that “a portfolio that minimises portfolio risk for a given expected return (or maximises portfolio expected return for a given level of risk) is said to be efficient.” The planner’s job is to assess your level of risk and then design a portfolio that provides the highest possible return for the risk you’re willing to take.
2. Investing is not about emotions. So if you are emotional about your investments, get an outside perspective. Experts who study investing identify all kinds of ways that we get irrational about our money. We fear regretting a bad decision. We hate to lose more than we love to win. All of these things cause us to make bad investment decisions. But you don’t need an expert to tell you this. You probably know about your own money related superstitions more than anyone else. Perhaps it’s the thrill of the hunt for stocks, the happiness you feel if you make a good investment or the guilt you feel if you spend too much. Or perhaps you’re just frozen with fear at the idea of investing at all. All of these emotions are bad for investing. The financial plan doesn’t take emotions into account. Financial planners pick a mix for you in your financial plan, advise you into taking the required risk to get on it and then keep you abreast of the developments which will inspire you to trust your investments.
3. You don’t have the time. Creating and monitoring an investment portfolio can be time-consuming. It’s difficult, too, to figure out your own investment performance as opposed to that of the funds you invested in.
4. You lack discipline. A planner will tell you exactly how much you must save to meet your goals. He’ll probably arrange for the money to be automatically withdrawn from your bank account or call you every month for the investments. So you’ll be saving and investing systematically. You’ll reach your goals, too. On your own, you might not even get started.
5. You lack staying power. When the going gets tough in the market, do you get going — out of the market? Studies show that most individual investors do much worse performance-wise than the funds they invest in. That’s because they move in and out of investments rather than sticking with them. A planner is in position to give you a research based advice.

So in a nutshell, planning is good for you — if you are willing to accept the risks associated with your decisions. Otherwise, it is always advisable to have a planner for yourself.