'Here are 3 things financial advisors won't tell you, but you really should know.'

“Should I work with a financial advisor? Or should I just do-it-myself?” 

This can feel like a challenging decision. 

You could try to figure it all out on your own. There is an overwhelming abundance of finance books, podcasts, blogs, and YouTube channels you could wade through. 

Watch: 5 money lessons your parents told you, that you should probably forget... Post continues below.

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But that takes time, patience, and energy, all of which are already in short supply for many of us. 

Instead, you could hire a financial advisor to figure it all out for you. 

But this option has its own hurdles. It can be expensive (you’re looking at an average cost of about $3,500 for a financial plan), and let’s be honest, the horror stories don’t inspire confidence. 

The world of financial advice seems complicated and hard to navigate from the outside.

Luckily, I have some insight into this world. 

A few years ago, I started a financial education platform. Since then, I've helped hundreds of people (many of whom are women) take control of their financial lives.


Over the years, I’ve spent hundreds of hours interviewing, hiring, and working alongside financial professionals to pull together our flagship Mastering Money program.

I’ve learned a lot about the ‘behind-the-scenes’ of the financial advice industry, and what a financial advisor can and can’t do for you.

Today, I want to share three things to keep in mind before you hire a financial advisor. 

1. Financial advisors can’t fix all your money problems.

Historically, the focus of many financial advisors used to be to sell you financial products (e.g. insurance policies, investments etc).

Nowadays there is more of a focus on helping clients achieve their financial goals. But even so, this historical context means there are certain things many advisors are not typically trained to deal with.

For example, if you aren’t good at saving money, a financial advisor might not be the best person to ask. 

Learning to save often requires behavioural changes, which many advisors aren’t equipped to help with. Many advisors prefer helping clients who already have savings figure out what to do with that money. 

There are many aspects to financial success that aren't really part of their job. Helping you overcome anxiety around investing, helping you reduce financial conflict in your marriage, or even advising you on how to increase your income, are things they may only be able to provide limited support with. 

So, before you hire an advisor, it’s a good idea to get clear on what specifically you want help with, and whether a financial advisor is the right person to help you. 


2. Your financial success is not their responsibility, it's yours.

Some people think hiring a professional is an ‘easy way out’ of having to understand their own finances. They close their eyes and let the professional sit in the driver's seat. 

Effectively, they abdicate responsibility for their own financial life. 

Sometimes this ends in disaster (like the horror stories you hear of scams and frauds).

Other times, it’s not a disaster but you may end up with ‘less-than-ideal’ outcomes. Maybe a cheaper investment option or different tax structure could have saved you thousands of dollars.

This isn’t just because of ‘rotten apples’. Even the ‘good ones’ have limitations. 

The best financial professionals won’t know every single product or strategy, they won’t be immune to human error and they will still be coloured by their own biases. 

So, even if you work with a financial professional, there is no substitute for being actively involved in the financial decisions that are being made about your money. 

Which brings me to…

3. The more you understand finance, the more value you can get from a financial advisor.

You might be thinking: “The reason I want financial advice is because I don’t know what I’m doing. Now you’re telling me I need to know what I’m doing to get financial advice?!”

But if you don’t know anything about finance, how do you tell if the advice you’re being given is any good or not? How do you know what questions to ask?

You don’t. 

I’ve repeatedly seen many of our students get far more out of relationships with financial professionals once they have a strong foundational understanding of their own finances first. 


You’ll be able to move faster if you’re not asking them to explain every piece of jargon. You’ll be able to ask good questions, and understand the pros and cons of different options. 

It will be a more collaborative relationship, with you actively participating in decision-making. 

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So before working with a financial advisor, here are 3 questions worth asking yourself:

1. Do I understand the basics of finance enough to be able to understand the advice they're giving me, and ask good questions to ensure the advice is a good fit for me?

2. If not, am I willing to just blindly accept and follow what they are telling me to do?

3. Am I clear on what I need help with, what goals I want them to help me achieve and how? Or am I just totally lost hoping that they'll "fix it" for me?

If you answered "No" to all 3 questions, chances are you'd benefit from doing some homework before working with a financial advisor.

Paridhi Jain is the founder of SkilledSmart, a financial education platform helping adults learn to save, manage and invest their money. For more money tips, you can grab a free e-book on "5 Money Mistakes Costing You Thousands" via their website, and learn more about their course, Mastering Money.

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