Financial advisors can help you manage your money, but many people avoid them because of misinformation. The mere thought of using a financial advisor can be intimidating. You might be uncertain whether it’s wise to trust a practical stranger with your intimate financial details. Maybe you don’t think you have enough money to even need help. Well, there’s a good chance that you’d feel differently if you knew the facts.
After doing some research to learn more myself, I’m here to help clear up misconceptions about financial advisors, and to show you that hiring a professional to help manage your finances isn’t so scary after all.
1. “I can’t imagine trusting a stranger with my money”
Does the idea of trusting someone with your cash and personal financial details seem a little scary? I think that makes you smart. However, it doesn’t mean you should avoid using a financial advisor. Charlie Massimo, CEO and founder of CJM Wealth Management, acknowledges that you may have to take a leap of faith. But you also need to do your homework.
A great place to begin is a trusted website. Find a few financial advisors who you think you might feel comfortable with, then roll up your sleeves — it’s time for research. Beyond checking with licensing boards and professional organizations like CFP Board and the BBB, treat this like a Match.com date: There’s no shame in internet-stalking someone you don’t know when your hard-earned money is at stake.
“We have social media,” says Massimo. “If I were searching for an advisor, I would definitely [find] them on Facebook, Twitter and LinkedIn. I would try to get a sense of how they act in their personal life… You really want to try and find out what that person’s core values are and you want to try and be aligned with [them] as much as possible.”
2. “I’m embarrassed by my past financial mistakes”
It can be scary to lay our financial souls bare to another person, particularly when we have preconceived notions about the industry. Some people think financial advisors only work with wealthy clients who have been amassing cash for their entire lives. It might feel intimidating to let the skeletons out of the closet.
The truth is, few people have textbook perfect financial histories. “We all have things in life that we’re embarrassed about,” Massimo says. And that’s the thing: those events are in the past. “We plan for moving forward, not what you’ve already done,” he adds.
3. “I don’t have much money — a financial advisor would probably laugh at me”
What’s the point of hiring someone to help you manage money you don’t have, right? Actually, that sort of is the point if want to get ahead. Remember, financial advisors aren’t just for the rich.
Do you feel intimidated to even approach a professional because you’re not bringing a ton of assets to the table? Massimo explains that “wealth” is relative to your stage of life. And even if you feel you should have accumulated more by now, don’t let embarrassment over your perceived financial shortcomings hold you back.
If the cost seems prohibitive, Massimo makes an excellent point: “Know that the cost of doing it on your own and making mistakes can be so much higher — more than you’d ever pay an experienced advisor.”
4. “Finances are personal”
Growing up, my parents never talked about finances, income or major purchases in front of others, and my brother and I were raised to behave the same way. The first time I overheard a friend ask another friend how much money she made, I nearly fell over dead.
Does it seem scary or uncomfortable to talk about something that many of us have been taught not to talk about? If so, make sure you’re distinguishing your audiences. My parents have always had a financial advisor. Keeping financial affairs quiet — not being that person who goes on and on about money at a cocktail party — is great. Keeping them so quiet that you’re missing out on financial advice is a mistake.
Massimo sums it up perfectly: “If you find someone you trust and who has integrity, financial planning and advising will be one of the most personal and successful relationships you have in your life.”
Massimo points out a few other inaccurate beliefs people may hold… and he clears them right up:
- Financial advisors rely solely on the firm’s research to make recommendations. Nope, not true! “Many advisors actually have detailed investment philosophies that they follow, which have nothing to do with research and are not media driven,” says Massimo.
- Graduating from a better school or having more designations after their name means a financial advisor is better. “Quality experience means more than any of those things,” Massimo explains. “You want to work with an advisor who has lived with bear markets and recessions and who understands how markets and clients react to those times.”
So, do you feel any better about the idea of working with a professional financial advisor? Remember that the path to financial success isn’t always straight, flat and narrow. Find someone who knows what they’re doing and who you trust to navigate the journey with you.
Read Our Complete Guide to Finding a Financial Advisor
- 5 Reasons You Need a Financial Advisor
- Why You’re Afraid to Find a Financial Advisor
- How to Find a the Best Financial Advisor
- Which Type of Financial Advisor is Right for You?
- How to Review a Financial Advisor: The Definitive Checklist
- Financial Advisor Glossary
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