Money Advice

There’s more value to working with a financial advisor than you think

Posted by The Simply Money Advisors Team on Jun 27, 2018 9:06:00 AM

What do you think a financial advisor does?

If you’re like many people, you might think he or she only picks stocks or other investments. In fact, that’s one of the more common excuses that we hear people give – or see them write in the “comments” section of online articles – as to why they don’t want to work with a financial advisor. They grumble, “Why should I pay for a service that I can do myself?”

And on the surface, yes, we agree – anyone can automatically save money in a 401(k) or an index fund and hope for the best. That doesn’t take a whole lot of skill. But if you think that’s a financial advisor’s only job, you’ve been completely misled somewhere along the way.

The real job of a fiduciary financial advisor (that is, an advisor who puts your best interests above their own) is much more comprehensive. A qualified advisor should be helping you figure out how all the competing components of your financial life work together – investments are just one aspect.

For example, an advisor also helps you with budgeting (“Can we afford that new car?”), retirement planning (“Should we be saving in a Roth IRA?”), Social Security strategizing (“Does it make sense for me to wait until age 70 to claim?”), tax planning (“How can I lessen how much capital gains tax I’ll be paying?”), estate planning (“Does a trust make sense for the kids?”), insurance planning (“Should I buy an annuity?”), college funding planning (“Which 529 plan should we use?”), and legacy planning (“How can we make sure our church gets money when we’re gone?”).

So while someone who downplays the value of an advisor might be able to handle investment picking on their own, do they have a grasp on all these other areas as well? Or more importantly, do they want to? Do you want to? You could spend hours just researching whether or not to roll over your 401(k) to an IRA. Don’t you have better things to do with your time?

Yes, financial advisors charge a fee. But so do lawyers, doctors, accountants, mechanics, and every other occupation that provides professional guidance and services. Ultimately, you need to decide for yourself whether or not the services you’ll be getting from a potential advisor are worth what you’re paying – remembering that, sometimes, the value comes from all the things you don’t have to deal with.

The Simply Money Point

At the end of the day, there will still be people who don’t believe there’s value in working with a financial advisor. And that’s fine.

But if you’re someone who’s looking for help in balancing the money needs and desires you have today against your savings goals for the future, a fiduciary financial advisor (such as a CERTIFIED FINANCIAL PLANNER™ or Chartered Financial Consultant®) is the person for the job -- and you’re shortchanging yourself if you think otherwise.

To learn more about retirement planning, visit our free library of “Retirement Resources.” You’ll find dates for live events, online tutorials, and downloadable guides – such as “How to Select a Financial Advisor.”

Take me to Retirement Resources

Topics: Financial Planning


Please remember that past performance may not be indicative of future results.  Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Simply Money Advisors), or any non-investment related content, made reference to directly or indirectly will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful.  Due to various factors, including changing market conditions and/or applicable laws, this content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained here serves as the receipt of, or as a substitute for, personalized investment advice from Simply Money Advisors. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. Simply Money Advisors is neither a law firm, a certified public accounting firm, nor a tax advisory firm and no portion of the blog content should be construed as legal, accounting, or tax advice. Please consult your own attorney, accountant, and tax advisor for legal, accounting, and tax advice. A copy of the Simply Money Advisors’ current written disclosure statement discussing our advisory services and fees is available for review upon request. Advisory services offered through Simply Money Advisors, a SEC registered investment adviser. Insurance services are offered through Simply Money Insurance Agency, a separate entity from Simply Money Advisors. Simply Money™ and the spiral symbol are trademarks of Simply Money IP Holdings, LLC.

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