Do I need a Financial Advisor?

image description

Why hire a Pro?

Last night I caught up with an old school buddy of mine who happens to be a financial advisor and owner of a financial advisory business for retail clients. Apart from talk of the ‘good old days’, our catch up led to some interesting conversation surrounding the role of financial advisors in today’s world of finance.

You may think you know everything when it comes to financial advisors, but perhaps just like myself you may find yourself learning something new in this article.

Now I do want to remind you that the information I tell you is not financial advice but rather a discussion of the role of financial advisors.

How can they add value to my life financially?

While many may seem to think events such as royal commission inquiries, COVID-19 lockdowns and recent changes to education and good character have decimated half of the participants in the industry I was assured this is not the case.

Instead, I was told financial advisors, in order to obtain the requisite qualifications in financial advisory they must pass a three-hour exam.

Financial Advisors are professionals who advise on a number of financial matters such as:

  • Financial Planning
  • Asset Allocation
  • Tax planning
  • Rebalancing
  • Timing withdrawals

To help you make this decision, I feel that it may be of benefit to you to consider the pros and cons that came up in our discussion the other night.


i. Financial Advisors can be objective about your financial situation

ii. Financial Advisors can help minimize tax burden

iii. Financial Advisors can help you manage market risk

iv. Financial Advisors can help you to a holistic approach in planning

v. Financial Advisors can fast track the achievement of your financial goals.


i. Financial Advisors can be quite costly (Well, that’s for the good ones at least).

ii. Lack of financial control

iii. Lack of accountability

Risk Implications

People say to do your “research” when it comes to big decisions like getting a “random person” to organise your financial life. And I mean when you put it like that it can sound quite daunting to some, but it may be that just like any other professional they are only as good as they are instructed and monitored.

Therefore, instructing your financial advisors on your risk appetite, expectations and engagement requirement could be a good idea. The communication you have with your advisor is paramount. If you find yourself struggling to understand, feel “left out” or come to a compromise with your financial advisor it could be a good idea you speak up about it or consider finding a financial advisor that is better suited to your financial interests. You may even find them quicker if you follow my tips.

Another potential risk that may arrive is from the financial advisor not actually knowing anything about new products available in the market. While they should be doing their best to be informed on new products, e.g. cryptocurrency etc it should also be up to you to direct them if you do, or as you propose it to them, ask them to consider whether it is an investment best suited to your financial goals.

For example, Marketlend, although secured lending is a centuries old practice, there does seem to be reluctance by some as it does not sit on the traditional platform. This “upgrade” to the secured lending world required many financial advisors to conduct their due diligence in response to the great demand by investors looking to diversify their investments. After doing such, quite a number of financial advisors became invested personally or on behalf of their clients in Marketlend.

Moral of the story is, a financial advisor should do their due diligence and use their knowledge and education to provide advice that is best suited to your financial circumstances and goals.

Now, before I leave you, everything you have just read it is simply a message passed on by an old friend who happens to know a lot about the industry. What you do with this information is up to you.


There is no question of value, but it would be in your interest to make sure the financial advisor you do decide to go with is not compensated to choose one investment or investments versus others. For example, the biggest commission is not always the best investment.

Thanks for hanging around and stay tuned!!

29 August 2022