Having more than one financial advisor or financial planner can offer several benefits, depending on your financial situation and goals.
Here are some potential advantages:
Diversification of Expertise:
Different advisors can come from a variety of backgrounds and have varying areas of expertise. Some advisors specialize in certain areas such as: retirement planning, real estate or insurance. By working with multiple advisors, you can tap into a broader range of financial knowledge and skills. This diversification can be especially valuable if you have complex financial needs, such as: estate planning, tax optimization, own a business or professional practice, expect a large inheritance, unsure about best way to fund your retirement, own concentrated positions and need diversification, or have many investments in several different accounts or asset classes and need to consolidate and/or monitor them very closely.
Risk Mitigation:
Having multiple advisors can help reduce the risk of making significant financial decisions based on a single perspective or bias. Each advisor can provide a second opinion or alternative strategies, which can help you make more informed decisions.
Conflict of Interest Mitigation:
Multiple advisors can help reduce the risk of conflicts of interest. If one advisor benefits from recommending specific products or services, another advisor may offer impartial advice. This can be particularly important when dealing with investment recommendations and financial products. Any advisor you work with should always be willing and able to disclose their method(s) of compensation and any potential conflicts of interest that their compensation method(s) might create.
Accountability:
Multiple advisors can provide a system of checks and balances. They can keep each other accountable for the recommendations they provide and help ensure that your financial plan is well-rounded and comprehensive. An advisor that is unwilling to work alongside other advisors, may be a “Red-Flag” and the reason(s) should be discussed.
Customization:
With multiple advisors, you can create a financial team that aligns with your specific needs and preferences. This can lead to a more personalized and effective financial plan.
Fresh Perspectives:
Different advisors may have unique approaches and insights. They can introduce new ideas and strategies that you might not have considered otherwise.
However, there are also potential drawbacks to consider:
Complexity:
Managing relationships with multiple advisors might be more time-consuming and complex. You'll need to coordinate their efforts and ensure they're all working toward your overall financial goals.
Cost:
Hiring multiple advisors may be more expensive, as you could pay multiple sets of fees or commissions. In most cases, this type of drawback can be minimized but you should always be mindful of the cost implications with whom you choose to select to help you with your finances.
Potential Conflicts:
While multiple advisors can mitigate conflicts of interest, there's still the possibility of conflicting advice or strategies. It's crucial to establish clear communication and coordination between your advisors. Your team should embrace your desire to work with more than one advisor if that is what you believe is best for you and your situation.
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Consistency:
Different advisors may have different approaches, which could lead to inconsistency in your financial plan. It's essential to ensure that your advisors are working together harmoniously.
In Conclusion:
Having more than one financial advisor or planner can be beneficial if it aligns with your financial needs and preferences. However, it's crucial to carefully select and manage your advisors, establish clear communication channels between them, and weigh the potential advantages against potential for added complexity and cost. Consulting with a trusted financial advisor to discuss your specific situation and goals is a good first step in determining whether multiple advisors are appropriate for you.
How can my firm help you take the first step toward a better financial future?
Whether you are:
>Considering adding an additional or complementary advisor
>In-the-Market to hire a new advisor
>Thinking you might benefit from a Second Opinion on your current planning (even if you are managing your own finances)
Give me a call or send me a text to (704) 589-0941 to schedule a 15 minute “Get Acquainted Call” so I can learn a little about your situation, goals and needs. At the end of that call; we should have a good idea if we can assist you in the areas you desire, if we would seem to have the foundation for a solid working relationship and discuss next steps - with a timetable for moving forward.
FAQs
Access to different specialisms. No single adviser can be an expert across all areas of financial planning. By using multiple advisers, you can pick specialists in the specific areas relevant to your situation - e.g. one for retirement, one for estate planning.
Is it better to have one financial advisor or multiple? ›
Here are some of the advantages of working with multiple financial advisors: You can get different viewpoints and perspectives on how to achieve your financial goals. Individual advisors can focus on different aspects of your financial plan, allowing you to get the benefit of specialized advice.
Is it better to have a financial advisor or financial planner? ›
If you have considerable wealth and require a long-term estate plan with multiple moving parts, such as preservation of capital, income generation, taxes, insurance and legal issues, a financial planner is likely the better choice.
How do I choose between two financial advisors? ›
How to Choose a Financial Advisor
- Evaluate your financial needs.
- Understand the different types of financial advisors.
- Learn what a financial advisor does.
- Know the cost of a financial advisor.
- Research financial advisors.
- Walk away if it doesn't feel right.
- Choose a financial advisor who teaches you.
The number of clients a financial advisor has depends largely on the advisor. Again, a typical client count is anywhere from 50 to 150 but there are several variables that can influence the actual number. They include the advisor's niche and the type of clients they serve, as well as how they work.
Is it worth paying a financial advisor 2%? ›
Without knowing the full scope of services delivered by the advisor, 2% may be too expensive for a portfolio of your size and for a relationship in which tax advice is not provided. This immediate, high-level evaluation is based on benchmarks for typical advisory fees, which we'll dive into shortly.
Is a 1% financial advisor worth it? ›
But, if you're already working with an advisor, the simplest way to determine whether a 1% fee is reasonable may be to look at what they've helped you accomplish. For example, if they've consistently helped you to earn a 12% return in your portfolio for five years running, then 1% may be a bargain.
What are the disadvantages of a financial planner? ›
Cons of Being a Financial Advisor
Working hours are often long, particularly in the early stages of growing an advisor business. Constant interaction with others can make this career less attractive for individuals who are introverted. Starting an advisor practice can require a sizable amount of capital.
Are financial advisors really worth it? ›
A financial advisor is worth paying for if they provide help you need, whether because you don't have the time or financial acumen or you simply don't want to deal with your finances. An advisor may be especially valuable if you have complicated finances that would benefit from professional help.
Do financial planners really help? ›
A financial advisor can help you hone in on your goals and map out a way to achieve them. This can be anything from starting to invest, buying real estate, saving for an emergency or retirement, or something else.
Generally, having between $50,000 and $500,000 of liquid assets to invest can be a good point to start looking at hiring a financial advisor. Some advisors have minimum asset thresholds. This could be a relatively low figure, like $25,000, but it could $500,000, $1 million or even more.
What is the best type of financial advisor to have? ›
This means they are legally required to work in your best financial interest. In addition, it's a good idea to find a financial advisor who is a certified financial planner (CFP), as they have in-depth financial planning knowledge and are always held to a fiduciary standard.
When to switch financial advisors? ›
In brief, consider changing financial advisors if you lose confidence in your advisor. In addition, if you're dissatisfied with your advisor's communication, you may wish to start looking for a new financial advisor. If there's a lack of transparency and trust, you should start looking for a new advisor immediately.
How many times should you meet with your financial advisor? ›
You should meet with your advisor at least once a year to reassess basics like budget, taxes and investment performance. This is the time to discuss whether you feel you are on the right track, and if there is something you could be doing better to increase your net worth in the coming 12 months.
What percentage of millionaires use a financial advisor? ›
The study reveals that 70% of millionaires work with a financial advisor, compared to just 37% of the general population. Moreover, over half (53%) of wealthy individuals consider their financial advisors their most trusted source of financial advice.
What percentage should a financial advisor take? ›
Many financial advisers charge based on how much money they manage on your behalf, and 1% of your total assets under management is a pretty standard fee. But psst: If you have over $1 million, a flat fee might make a lot more financial sense for you, pros say.
Should a couple have the same financial advisor? ›
Deciding whether to share the same financial advisor requires careful consideration. The key is finding a professional who not only understands the couple's financial landscape but also respects the individual goals and concerns of each person. Most experts recommend sharing a financial advisor.
Is it OK to switch financial advisors? ›
Sometimes you're just not a good fit for each other. That doesn't make anybody a good or bad person, but it doesn't mean you need to keep working together. If your advisor is on a totally different wavelength (and not in a good way), it's okay to find somebody that resonates with you.
