What Your Financial Advisor Can’t Do For You
A financial advisor offers sound advice and direction for everyone with investments and other financial decisions to make. They provide expertise and insight, and many strive to become trusted advisors and partners to their clients.
However, while advisors have a wealth of knowledge and experience, they can’t do everything. In fact, there are a few key areas that advisors are unable to help you with. Understanding what a financial advisor can’t do can help you and them both create the best plan for your financial future.
Why a Financial Advisor Can’t Beat the Market
A large part of what a financial advisor will do is to manage an investment portfolio on your behalf. While this can help you get the most out of your investments, it can’t guarantee that you’ll beat the market.
No financial advisor can guarantee that you will outperform the stock or bond markets. Markets are unpredictable and a “hot stock” can tank just as quickly as it rose. Financial advisors live and die by their portfolio performance, so they understand that even their best efforts can’t guarantee good returns.
No Control Over the Market
Financial advisors can help you make sound decisions based on what is happening on the markets, but they can’t control the markets. Only a handful of institutional investors and Wall Street professionals can influence the market, making it impossible for any financial advisor to control the market’s performance.
Advisors are limited to helping you plan around the markets and make sound decisions, which doesn’t give them the authority to steer the markets.
Why a Financial Advisor Can’t Do Your Taxes
Many financial advisors help their clients with the tax filing process. However, they cannot do the actual filing of taxes on their clients’ behalf.
By law, only certified public accountants (CPAs) are allowed to file taxes and provide tax advice. Most financial advisors have no more regulatory authority than what is required for their license. This means that even if your financial advisor is experienced in tax filing and tax law, they cannot offer that service to you.
Why a Financial Advisor Can’t Make You Rich
Most people want to be as wealthy as possible and plan for a secure and comfortable future. However, a financial advisor can’t make this come true.
A financial advisor will help you make sound decisions about your money and risk management, but they can’t guarantee your future prospects. Your financial advisor will help you determine a realistic level of growth and return, but they can’t guarantee that you won’t hit a rough patch.
Why a Financial Advisor Can’t Make All Your Decisions For You
Though you may have a financial advisor and trust their judgment, it’s still important to make some of your own decisions.
No one knows your goals, values and risk tolerance quite like you do. Even though there are decisions that your financial advisor can make based on their expertise, it’s still important to be involved in the process.
You are ultimately responsible for the decisions you make. Understanding why a financial advisor can’t make all decisions for you can help ensure that you make sound decisions and take a more active role in the process.
Why a Financial Advisor Can’t Fix Outstanding Debts
Financial advisors can give you advice and direction on how to manage your money, but they cannot help you pay off any outstanding debts you may have.
Advisors are experts in investment and portfolio management, but their goal is to ensure that your investments perform as efficiently as possible. They can’t be expected to take on the additional task of helping liquidate or pay off any debts you may owe.
Take Beneficial Advice From Your Financial Advisor
If you’re looking for an expert to help with your financial investments and portfolio management, a financial advisor is the right choice.
Financial advisors have a wealth of knowledge and experience. But while they can offer you beneficial advice, they can’t do every task related to your financial health. Understanding the areas that your financial advisor can’t cover can help ensure that you get the most from your advisor.
