what should a financial advisor do for you?

Need to answer questions about personal finance, planning for the future (such as kids or retirement), or maximizing investments?

You might assume you need a financial advisor. Afterall, we know there are moments when you really, really need a trusted expert by your side. We’re here to shed light on:

what can a financial advisor do for you
when to seek a financial advisor for help
how much does a financial advisor cost

Plus, the cherry on top – do you really even need a financial advisor in your life?

At Penny, we believe all women have the potential to become their own financial mentor. (We’ve seen it enough to know it’s true!)

So you know it’s time to get real. Let’s get to it.

👀 6min read

financial mentor

📸: Death to Stock

What the heck can a financial advisor actually do for you?

The financial advisor “title” is a bit of an umbrella term, hosting many different specialties under its wealthy shade.

We picked the top 3 certifications most people think of when looking for a financial advisor. So what can each of these financial mentors do for you, really?

Here’s what you can expect from your financial advisor(s).

What can a Certified Financial Planner (CFP) do for you:

They’re (literally) planners. CFPs can help you create a roadmap for your financial wellness, from simple budgeting to more complex questions around taxes, insurance, and retirement.

Ask them about: creating a long-term financial plan or big picture consulting to answer general finance questions.

What can an Investment Advisor (or Analyst) do for you:

Advisors and analysts often deal (sometimes, exclusively) with investments and wealth management; they might have some knowledge of other financial buckets, but investing is their expertise.

Ask them about: managing investment assets and creating a balanced portfolio.

What can a Certified Public Accountant (CPA) do for you:

Accountants can provide financial advice, and can excel at tasks like bookkeeping and long-term analysis. But when it comes to personal finance, there’s one area where they truly shine: Taxes!

Ask them about: filing complex tax returns, maximizing deductions, and tax planning post-retirement.

Now that you know (roughly) who to ask for what, the question remains:

When might you need a financial mentor or advisor?

When do you need a financial advisor?

The good news:

For most of the financial decisions you encounter, you actually DON’T need a financial advisor. At. All.

Not until… (drumroll)

You face: a Really Complicated Question.

These are queries that no amount of hours reading, studying, or scrolling can (appropriately or accurately) answer for you.

Think…

Restricted stock options
Inheriting a family biz
Investing in real estate assets
Managing multiple life insurance policies
Financial planning with 3+ kids (each with their own 529 accounts, college funds, etc)

Did that list make your head spin?

Yep. Exactly.

When it comes to Really Complicated Questions, sometimes you can get by on ice cream or grandma’s hearty soup. Others, you need a specialist.

That’s where financial advisors come in.

But, buyer beware: first, you’ll need to prep your wallet.

How much does a financial advisor cost?

Mostly, financial planning and tax services are fee and service-based; while investing and wealth management is a percentage.

If a financial advisor is managing your wealth (assets, investments, etc), the price tag is often:

Around 1% – no matter what! – of the assets or wealth managed for you, if they’re a human being.
Or 0.25 to 0.55% for a “robo-advisor” – aka “robots” who act as financial advisors; they support your investments with zero or minimal human interaction. Examples include companies like Wealthsimple, Questrade, Fidelity, and more.

Hourly rates can vary by extremes, from $100 to $400 per hour. They can also charge set fees for services, like $1,800 to $2,500 to create a full financial plan for you or your family.

But…

That’s not even the “real” hurdle.

Here’s the (bad) catch:

When it comes to “traditional” financial planning or wealth management, most financial advisors only work with those who own at least $100k or more in wealth.

Yes. One hundred THOUSAND dollars. Or more.

Who has that?? – 70% of women don’t.

(Hence why Penny exists. Save money & become your own financial guru.)

But…

Forget how much money you have, for a second.

Even if you have millions in the bank, that doesn’t mean you NEED to pay someone to manage your money.

Why?

#1: From budgeting to investing, there are many tools that allow you to do it yourself! Why bother paying someone to complete simple tasks when you can save money with automation? (You guessed it: Penny is one of them!)
#2: When you learn how to manage your own money, you can make better decisions for your financial future. No financial mentor or advisor will ever know your personal goals, money habits, or wallet better than you do.

Based on this, you can probably already guessed the answer to the final question: does it make sense to outsource your finances? (sometimes.)

Does it even make sense to get a financial advisor?

For the most part… No.

You can easily learn the difference between an IRA or 401k retirement account. (And how to set one up for yourself.)

You can even become a pro at investing! Without eating risk for breakfast, or waking up at 4am to catch the stock market.

And yes:

You can 1000% manage your family finances while ensuring you, your partner, and your kids are financially secure for years to come.

We know, because this is part of what we teach within Penny.

However…

We ALSO know there are times when you’ll need extra help from the experts to answer a Really Complicated Question.

That’s when you know you’ll need a financial advisor.

For everything else? Penny’s got your back.

(And don’t forget grandma’s hearty soup! We like this recipe a lot.)

At Penny, we believe you only need a financial advisor when you face a seriously complicated question or complex financial situation. For most day-to-day personal & family finances, we empower women with the knowledge and tools to become your own financial mentor – and a damn good one, too! Afterall, when it comes to finances, no financial guru knows your wallet better than you. Why not become your own? Take the free money quiz to unlock your potential.

Attend one of our free masterclasses.

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