Should I Hire A Financial Advisor?
I’ve never actually had anyone verbally ask me this question. But I know most of us are wondering it.
I’ve identified that hiring a financial advisor falls into the category of things I “should do”.
Like going to college. Or buying a house. Or contributing to retirement.
It’s deemed smart and “everyone else” does it so most of us assume it’s just the right thing to do.
I want to ask the question though of whether it really is a smart thing to do.
So let’s start here:
Why would I hire a financial advisor?
Well for me, it’s because there’s something I need help with. I’m trying to accomplish something with my finances and I’m asking for the help of a professional because I don’t know how to do it myself. Otherwise it would be done already and I wouldn’t be asking for help. Right?
If I simplify that even further, I am only asking for help because there is something I don’t know. Knowing is evidenced by doing and achieving. So if I am not doing and achieving, then it is apparent that there is something I don’t know.
Simply put, I am hiring a financial advisor because I lack knowledge on finances. I may lack knowledge broadly or in a specific area, like which investments to pick.
But nonetheless, my need is driven by the lack of knowledge.
Does a financial advisor give me knowledge?
This would be the next logical question I have to ask myself. If I lack knowledge, then the solution would be for me to go get educated.
And if I am reaching out to a financial advisor for that, then I need to ask myself if it is their job to give me knowledge.
I wanted an accurate description of the job of a financial advisor so I looked at the definition.
A financial advisor is defined as: “a person who is employed to provide financial services or guidance to clients.”
I don’t see anything in there about education.
So I’m now led to ask another question:
What does a financial advisor provide?
Well, by definition the first thing they provide is financial products.
Mutual funds. Stocks. Bonds. Annuities. Life Insurance. IRA’s. 401k’s. These are all financial products that a financial advisor sells. That’s their main job.
The second part I see is that they provide guidance to clients.
What is guidance? Advice or counsel.
Essentially they’ll share their opinion with me.
Their opinion regarding what? Well, their main job is to sell financial products and so their opinion will be about which financial products I should buy.
Notice in the definition above it also says that a financial advisor is “employed”.
Who are they employed by?
Wall Street. They work for Wall Street as a sales and distribution source for the financial products that Wall Street manufactures and sells.
Does this help me?
I need education. Right? That’s why I’m looking for a financial advisor. Because there are things I don’t know about money.
To me, it doesn’t make sense that I would reach out to a financial product salesperson whose job it is to sell and guide people into financial products for Wall Street. My problem isn’t being solved. I’m still uneducated with money.
If I lack education about money, then I need to reach out to someone who will help me learn about money.
A financial advisor doesn’t do that. And if they do, I’ll be learning about how financial products work. Not about how money works and how I can improve my finances.
If I want to learn about money, I’m going to go read books about or written by people who had or have money. Not go to a financial advisor.
When would I hire a financial advisor?
There are only two times I’d hire a financial advisor.
- I want a specific financial product that they sell and I’m going to buy it from them.
- I want them to get paid, regardless of my own needs.
In other words, I need a mutual fund. They sell the one I want. I go buy it from them.
Or the guy is my buddy and I want to help him get paid so I buy something just to support him.
So what should I do instead?
First, beginning studying and learning about money. I help with that. There are several books and online courses I can help you with so that you can become financially educated and navigate your economic future with more certainty. I shouldn’t be investing and buying financial products if I don’t have a plan.
Second, get a plan. I call this the financial blueprint. It is hard for me to know what to do until I know where I am and where I am going. I shouldn’t be investing and buying financial products if I don’t have a plan.
I was a financial advisor for about 5 years….
And what I learned was that the financial system is broken. I was selling financial products and services to clients who still didn’t understand money and still didn’t have a plan.
The model of going to a financial product salesperson and buying what they offer with little to no financial education and no plan in place beforehand is broken.
The stats around us show that America is failing with money. This means that the system we are using to help with money is failing.
So, if you’re reading this and wondering if you should hire a financial advisor or even if you already have one…I want to offer to help you understand money better and get a plan in place.
When I got that for myself, I became more certain and began building wealth and making progress.
To take me up on this offer click here.
Own Your Potential,
Jerry Fetta
Jerry Fetta helps create financially educated and wealthy families who navigate their economic futures with certainty and help build prosperous communities around them. If you’d like to experience this for yourself and your family, then get more information about Jerry Fetta and Wealth DynamX by going to Membership.JerryFetta.com
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