If Financial Advisors Are So Good, Why Don’t They Just Invest for Themselves?

For some reason, people tend to be skeptical about financial advisors. They might say it doesn’t make sense to pay for a financial advisor when you could put your money to work on your own.

In this Reddit post, we have someone echoing that sentiment, but they also pose an interesting question: If financial advisors are so good at building portfolios, why don’t they just invest their own money and get rich from it? Why bother trying to help other people build wealth?

It’s a valid question. However, it’s important to understand the value financial advisors bring to the table, and what their goals and intentions are.

It’s not just a matter of getting rich quickly

Most financial advisors don’t pursue that line of work to make a lot of money quickly. There are, frankly, easier ways to do that. Rather, they get into the business to help people.

To be a good financial advisor, you have to be a good listener and relationship builder. You also have to know a lot about not just investing, but other components of financial planning, like insurance and healthcare.

A big reason financial advisors don’t just invest their own cash and call it a day is that they want to play a role in helping people meet financial goals, and they enjoy the interaction.

Also, let’s face it — to be able to make a lot of money investing, you need to have a decent amount of money to start out with. Even a very savvy investor isn’t going to be able to live on their portfolio income after a year or two if they’re only starting out with $5,000 or $10,000.

Granted, over time, it’s possible that a financial advisor might accumulate a few hundred thousand dollars, invest it, and stop working with clients. Usually, though, that doesn’t happen.

Plus, it’s not as if every financial advisor is an investing wiz. Rather, financial advisors take a holistic approach to managing people’s money. Sometimes, the strategies they suggest aren’t all that innovative and complex. However, they still enable people to meet their goals.

It’s important to find the right person for the job

If you’ve been on the fence about hiring a financial advisor, you should try sitting down with a few different ones and hearing what they have to say. Of course, if you’re going to trust someone to manage your money, you need to find the right person for the job.

To that end, try to find a financial advisor who:

• Listens to your goals and concerns
• Explains their approach to money management thoroughly, and doesn’t just throw financial terms at you that you don’t understand
• Doesn’t make you feel judged in any way
• Discusses their fees openly so there are no surprises
• Acts as a fiduciary, which means your best interests have to be put first
• Communicates well and has an easy platform where you can track your progress

With the right financial advisor in your corner, you could bring yourself closer to meeting the goals you’ve set. It’s worth giving one a try, and you may be surprised with the results.

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