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Retirement can be a golden period for do-it-yourself investing because there’s more time to manage your portfolio with care.

But some self-directed investors feel that retirement is a good point to consider handing off their portfolio to an adviser. So it is that a reader who did well in the market rally earlier this year sent this question: “We are retired and need someone to take over [our portfolio],” she wrote. “What are the (dis)advantages of using a wealth management firm? Particularly in the ‘new post-pandemic’ economy?‘”

Ideally speaking, handing your portfolio to a wealth-management firm to run is like hiring experts to take a vital project off your hands. You pay a fee, probably 1 to 1.5 per cent of your account assets, in return for having someone build and maintain your portfolio for you. Other services covered by that fee should include some degree of financial-, estate- and tax-planning.

The pandemic by itself has not changed investing, though self-aggrandizing investment people may tell you otherwise. Diversification with stocks and bonds is still the foundational principle of portfolio-building. And yet, the next couple of years could be quite the challenge for investors. We simply don’t know how damaged the economy was by COVID-19 and how long it will take for growth and corporate profits to return to the old level. A disciplined, experienced wealth-management firm can navigate a portfolio through the uncertainties ahead without getting faked out by bursts of market volatility. That’s a clear benefit for a DIY investor.

The disadvantage of using a wealth-management firm is the cost. Fees paid for advice will cut into returns at a time when interest rates are very low and stocks may be constrained by slow economic growth. Why accept the diminished returns you would very possibly get from using an adviser?

It’s not because the adviser can deliver market-beating returns that exceed what you’d get from owning cheap, market-tracking exchange-traded funds. Advisers who can consistently do that are rare. No, the real benefit of the adviser is in supplying a package of services with real value – guiding a portfolio through a post-pandemic world while providing the planning that gives investing much-needed context.

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