From Yahoo Finance: 2025-05-07 08:30:00

Chris argues that investing in CDs at over 5% return with no fee is better than working with a financial advisor who takes a 1% fee. However, advisors offer more than just investment advice, providing holistic financial planning including asset allocation and risk management. CDs alone may not meet all financial needs.

While CDs offer a guaranteed return, relying solely on them may not be sufficient to achieve financial goals. Advisors offer comprehensive planning beyond investment management, addressing factors like taxes, estate planning, and risk management. Studies show advisors can add significant value, potentially generating 3% or more in net gains compared to individual investors.

CDs are not risk-free; they expose investors to reinvestment, promotional rate, call, and inflation risks. Additionally, CDs may limit liquidity and tie up funds for extended periods. Working with a financial advisor can help navigate these risks and develop a diversified investment strategy to protect against over-exposure to any single sector or risk factor.

Consider a financial advisor’s fee as an investment in comprehensive financial planning. While CDs may offer attractive rates, they do not replace the value an advisor can provide. Advisors can create personalized asset allocation strategies, address longevity risks, and help manage unexpected expenses in retirement. A holistic approach to wealth management increases the likelihood of achieving financial goals.

Read more: Are CDs Really Better Than Hiring a Financial Advisor?