Putting 5 myths about financial advisors to rest
Finance 101
If you’re putting off talking to a Financial Advisor (FA), it’s likely because you prefer a do-it-yourself approach, think they’re all alike or just aren’t sure why you’d need one. After all, who really wants a stranger telling them what to do with their hard-earned money? However, once you understand how FAs work, you may realize how advantageous they can be in helping you reach your specific financial goals.
To set the record straight and make it easier for you to find an advisor you trust, we’ve interviewed a few of our own Financial Advisors to debunk some of the most persistent myths about the process.
Myth #1: Financial advisors make every investment decision
Ultimately, an FA doesn’t decide for you, they merely advise you—you’ll always have the final say. Advisors will make recommendations based on institutional investment knowledge, research and education, but it’s up to you to decide whether to proceed with the investments recommended or offered.
Myth #2: Financial advisors control your money
An FA does not control your money, they can only point you in the right direction when it comes to the financial products you can invest in. With most personal retirement accounts like an IRA, you’ll have access to your funds at any time, though there are tax implications. Other investment vehicles—such as annuities, which are long-term contracts between an individual and their insurance company that helps to provide retirement income—restrict your ease of access until a certain time.
Myth #3: You won’t be able to change your advisor
Not true. Once you’re with an advisor, you’re not locked in to using their services. If you’re not pleased with their performance for any reason, you’re always able to move your money elsewhere, whether it’s to another advisor at the same company or to withdraw it altogether.
Myth #4: FAs only recommend investments that benefit themselves
False. If your FA is a fiduciary (an advisor required by law to fairly manages assets on behalf of another person or entity), they’re legally obligated to steer you toward investments that benefit you regardless of their compensation as well as recommend investments based on what’s in your best interest above all else. Ultimately, they benefit when you benefit.
Myth #5: You don’t make enough to work with a financial advisor
This couldn’t be further from the truth. First, regardless of how much money you have in the bank, you can find a financial advisor to work with as long as your income is steady. Second, there is no obligation in having a preliminary conversation with one to start discussing your needs, exploring your options or reviewing your goals.
While the search for an advisor you believe in can be difficult, they’re instrumental in helping you prepare for retirement. The best way to begin the conversation is to be honest about where you are and where you want to go. Never forget that their job is to help you get there, not to make money at your expense.
Advisory services offered through John Hancock Personal Financial Services, LLC, an SEC Registered Investment Adviser. Boston, MA 02116. 888-955-5432.
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