When you hear the words financial advisor, what pops into your head? Maybe an older man in a suit, sipping black coffee in a corner office, talking about “diversification” in a language that feels like a different language. Believe me, there’s a lot of them.
Financial advisors have a reputation. Some people picture that same guy in a suit trying to sell their grandma a random insurance policy she doesn’t need. Others assume advisors are only for people with seven figures in the bank.
Neither is always true, and none of those things are really what a true financial advisor is. But honestly? I get it. That reputation didn’t come out of nowhere.
If you’ve ever asked yourself, “Do I need a financial advisor?” You’re not alone. Over the years, I’ve had this question come up hundreds of times, usually from smart, capable people who just feel overwhelmed by money. So, let’s clear things up from someone who’s been in the financial world for over 15 years. Before we even get into whether you actually need a financial advisor, let’s start with the basics: what a financial advisor truly is…and what they’re definitely not.
A Financial Advisor vs. Just Someone Who Moves Your Money
At its core, a financial advisor is someone who helps guide you through money decisions throughout each season of your life, like investing, retirement planning, talking strategy around taxes and estate planning, etc. They are there to help you make smart decisions with your money so you can reach the goals that actually matter to you.
But here’s a key distinction: not everyone actually needs a financial advisor, but almost everyone can benefit from a financial planner. A planner helps you see the big picture of your overall financial life, whether or not you have millions to invest.
Now the reality is that the term “financial advisor” gets thrown around a lot. Some advisors just make a few investment changes a year, barely check in, and charge a fee for work you could do yourself. And that’s exactly why they get a bad reputation.
You don’t need someone who only manages your investments.
A great financial advisor, however, is also a planner. They help you answer the questions that truly shape your future, like:
- Are you on track for retirement?
- Do you have the right insurance coverage?
- Should you pay down debt faster or invest more?
- How should you save for your kids’ college education?
- What’s the smartest way to minimize taxes?
- Are your assets protected if something unexpected happens?
- Are you on the right path to reach your goals?
Those are the questions that shape your financial future, not whether your portfolio is 70% stocks or 75%
If your advisor is only rebalancing your portfolio once or twice a year, you’re missing out on arguably the most important aspects of your financial life and financial advice and paying way too much for way too little.
This is exactly why financial advisors have earned a mixed reputation. Too many people work with someone who just “manages the money” without ever addressing the bigger, more personal pieces of their financial lives.
That’s why I always say: your advisor should be both your investment manager and your financial planner. Not everyone needs an investment manager – but almost everyone needs a planner. One person should see the full picture of your finances and guide you in all areas, not just tweak numbers on a screen. And if you’re not ready for, or don’t need, full investment management, a financial planner or coach can help you structure your finances, create a plan, and give you the clarity to make your money work for you and your future.
The thing is, not all advisors are created equal. Some just fiddle with investments, while the right one looks at your whole financial life. Knowing the difference, and which type of advice you really need right now is key (we’ll dive into that more in Part 2: Financial Advisor vs. Financial Planner vs. CPA vs. Coach).
Misconceptions About Financial Advisors
There are a few big myths floating around about financial advisors:
1. They’re only for rich people
False. Advisors can help anyone who has a mix of responsibilities, investments, long term financial goals, debt, or complex finances. Even if your portfolio isn’t massive, the right advisor can help you maximize every dollar.
2. They just make money off commissions
While some advisors work on commission, the best ones work on a fee only basis, often as a percentage of assets under management (AUM). This aligns their success with yours, when your financial life and investments grow, they do too.
3. You need them to pick stocks
Not true. Investment knowledge is just one part of the value and truly, can be one of the easier parts of financial advice. The real win is strategic planning: making sure every aspect of your money works toward your goals.
This is exactly why, in Part 3 (Do I Need a Financial Advisor?), we walk through scenarios for when an advisor actually adds value, and when you can handle it yourself.
So, What Kind of Financial Advisor Do You Actually Want?
Now that we’ve talked about what a financial advisor really does, here’s the truth: you want someone who checks a few key boxes.
They’re also your planner
Investments are just one piece of the puzzle. Your advisor should help with everything like, retirement, taxes, budgeting, saving for the kids, insurance, estate planning, you name it. If they’re only touching your portfolio once or twice a year, you’re missing out on the bigger picture.
Transparent and trustworthy
You should fully understand their fees, investment strategy, and how they’re helping you reach your goals. This is a meaningful relationship in your life, choose accordingly.
Accessible and responsive
You’re not looking for a once a year check in. You want someone proactive, who follows up on your questions, and keeps an ongoing dialogue with you over time.
This naturally leads into Part 4 of the series, where I dive into exactly what to look for in a financial advisor or planner, including the traits, skills and services that separate the great ones from the rest. And once you’ve narrowed down your list, Part 5 breaks down the 5 key questions to ask before hiring a financial advisor or planner so you can make an informed, confident choice!
Key Reminders For You
- A financial advisor should not just move investments, they should be your planner and strategic partner.
- Misconceptions and bad experiences usually come from advisors who aren’t doing enough or are commission driven.
- You don’t need to hire someone just for small changes you could make yourself. Hire someone who makes an impact across your entire financial life.
- Done right, a financial advisor can simplify your life, save you money, help you build meaningful wealth and feel in control of your financial future.
Check Out the Full Financial Advisor Series:
Curious about whether you need a financial advisor, what type to hire, and how to make the best choice for your life? See the full series below.
- What Is a Financial Advisor?
- Financial Advisor vs. Financial Planner vs. CPA vs. Coach: What’s the Difference?
- Do I Need a Financial Advisor?
- What to Look For in a Financial Advisor or Planner
- 5 Questions to Ask a Financial Advisor Before Hiring
And if you want a personal roadmap to see how an advisor, planner and CPA could help you right now, schedule a 1:1 with me. We’ll map out what’s possible for your financial life today and for tomorrow!
