A Financial Advisor vs an Investment Advisor

I often hear from folks that financial advisors are a commodity. They say you will get the same set of services no matter who you use.

Nothing could be further from the truth. There are very few industries where there is a larger difference amongst providers in the number and types of service offered than in the financial services industry.

Furthermore, I have found very little difference in pricing between those practices that include just basic services and those that offer an additional wide variety of more detailed services.

This represents a tremendous opportunity for consumers to extract a lot of value for themselves if they can identify and connect with a professional that can provide them with the most comprehensive set of services.

Many folks call themselves financial advisors. However, I have found that many of those who identify as financial advisors are generally investment advisors. Few are real financial advisors.

Investment advisors help with investment decisions. Financial advisors help with investment decisions plus a lot more! Below, is just a sampling of how true financial advisors can help with investments, but also go a lot further:

  • How does an investment decision impact the allocation of all your investment assets?
  • What are the tax ramifications of an investment change? Does this change put you in a new tax bracket? Does the investment change cause more of your Social Security to be taxable if you are currently claiming?
  • When should you and your spouse claim Social Security? What brings you the greatest benefit and saves the most in taxes?
  • Speaking of taxes, true financial advisors determine how decisions made through the year can impact your near and long-term tax picture. They also evaluate strategies that could potentially mitigate your long-term tax obligations.
  • Maybe some of the investment proceeds should be used to pay down your mortgage. Financial advisors help evaluate the status of your mortgage along with any other debt to determine the best way to manage this over time.
  • Financial advisors should evaluate all your employee benefits to determine the best choices for you and your family. What retirement plan choices should you be making?
  • How about your executive compensation plan? A financial advisor can help you implement a strategy for your stock options, your restricted stock, and your performance shares.
  • A financial advisor should also make sure that your family is protected and evaluate the details of your estate plan. Does your estate plan properly match up with your retirement account beneficiaries?

Do you have enough saved for retirement? A financial advisor can help evaluate what your retirement picture looks like. Modeling your cash flows leading into retirement and during your retirement phase is critical to making sure you will have enough money throughout retirement.

A financial advisor can help you properly structure your liquid and illiquid assets to provide a reliable income in retirement.

Perhaps you don’t need many of the services above. However, many need help with at least a few items on the list. Wouldn’t you want to at least have the option to explore some of these needs should they come up?

The end of the year is a great time to explore your existing relationship with your advisor. Do you need one if you don’t currently have one? If so, what type of service offering do you need from them? If you currently have a financial advisor, but they seem to be an investment advisor, should you consider the possibility that you can get access to a much more comprehensive set of services than you have been receiving thus far, often at the same cost?

We offer a complimentary initial consultation to find the best advisor for you, even if it is not us.

Our motto is “we can help you with that.” We will collaborate with you on any financial decision you make, engaging other subject matter experts when necessary. We will not stop until we get things right.

We encourage you to reach out to us for assistance in making important financial decisions and we always appreciate you recommending us to others.