A great financial advisor does much more than manage your investments. They should act as your financial partner, helping you navigate life's complexities, build wealth, and secure your financial future. But not all advisors provide the same level of service. Some may focus solely on investments or juggle too many clients to give you personalized attention. So, how can you tell if your advisor is truly adding value? In this article, we’ll cover five essential things your financial advisor should be doing for you to ensure your money is working as hard as you are.
1. Creating a Personalized Financial Plan Before Investing
Before investing, a top-tier financial advisor should first develop a comprehensive financial plan tailored specifically to your goals. Using industry-leading financial planning software like MoneyGuidePro or eMoney, they should assess your risk tolerance, retirement goals, tax strategies, and more. This plan becomes the blueprint for your investments, ensuring that your money is working towards your personal objectives.
Many advisors charge separately for this service, but they shouldn’t—financial planning is integral to the advisor’s job, not an add-on. Without a comprehensive financial plan, investing is essentially guesswork. A well-crafted plan provides the "why" behind your investment strategy and ensures your portfolio is aligned with your future goals.
2. Reviewing Estate Documents and Annual Tax Returns
A well-rounded financial advisor does more than manage your portfolio—they ensure all aspects of your financial life work together. Reviewing your estate planning documents, such as wills and trusts, as well as your annual tax returns, is essential.
Why? Because overlooked details can lead to costly mistakes. For example, outdated beneficiary designations may leave your assets to unintended recipients, while missed tax-saving opportunities could mean you're overpaying each year. By reviewing these documents annually, your advisor ensures your current financial position is optimized and your legacy wishes are met. An annual tax review can uncover inefficiencies and missed deductions, further enhancing your overall wealth strategy.
3. Proactive Portfolio Management and Tax Loss Harvesting
Investments are not a "set it and forget it" strategy. A proactive financial advisor will consistently monitor your portfolio and make necessary adjustments to keep it aligned with your long-term goals. This includes rebalancing your portfolio and taking advantage of opportunities like tax loss harvesting, which allows you to reduce taxable gains by selling underperforming investments at a loss.
Effective tax planning is a crucial part of protecting your wealth. By focusing on tax-efficient investing, your advisor ensures that more of your earnings stay in your portfolio rather than being eroded by taxes. A reactive advisor who only makes changes when the market fluctuates may miss valuable opportunities, but a proactive one will optimize your returns while managing risks and taxes on a continuous basis.
4. Providing Regular Check-Ins and Full Financial Reviews
If you're only hearing from your advisor once a year and have not engaged in financial planning, you might just be another number in their client base. A high-quality financial advisor should meet with you regularly—ideally on a semi-annual or quarterly basis—to review your portfolio and address any changes in your financial situation.
At some larger, corporate advisory firms, advisors often manage 300-500 clients, limiting the amount of personalized attention they can provide. In contrast, boutique firms typically serve fewer clients—usually between 75-125—allowing for more customized service. Additionally, advisors at large national firms may be pressured to meet internal performance metrics, which can dilute the client experience. These metrics often prioritize product sales over personalized advice.
By regularly checking in with you and providing full reviews of your financial plan, a strong advisor ensures that your portfolio aligns with your goals and any life changes. If this level of communication is lacking, it might be time to reconsider your relationship with your advisor.
5. Holding You Accountable for Your Financial Goals
One of the most important roles of a financial advisor is to encourage you to take action on your goals. Whether you’re saving for retirement travel, planning to start a business, or funding your children's education, your advisor should provide guidance to help you move forward and ensure your financial decisions are aligned with those objectives. They should regularly assess your financial situation to confirm you're on track or recommend adjustments needed to achieve your goals.
If traveling during retirement is something you've always dreamed of, your advisor should be there to help you determine whether your finances can support those plans and turn that dream into reality. And if starting a business has been on your mind, your advisor should collaborate with you to build a financial plan that balances your entrepreneurial aspirations with your broader financial security.
By encouraging action and holding you accountable, your financial advisor helps you achieve not just financial success but personal fulfillment as well.
Find a Financial Advisor Who Meets Your Needs
Your financial advisor should do much more than manage your portfolio—they should help you build, protect, and grow your wealth while keeping your goals at the forefront. If your advisor isn’t delivering on these five key areas, it might be time to consider making a change.
If you're seeking an advisor who provides this level of personalized service, you can connect with financial professionals who meet these criteria through our platform. The right advisor will support you every step of the way, ensuring your financial plan adapts as your life and goals evolve.
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