There is a lot of misinformation and bias in the financial world regarding using a financial advisor. For better or worse, the “financial advisor” title often takes on a negative connotation that gives people the idea that the advisor is simply out to grab their 1% and do the bare minimum. 

The reality is that financial advisors are far more than just 1% “grabbers,” and one Redditor posted in r/Fire looking for some individuals who have had both good and bad experiences. The real question is whether or not a financial advisor is worth it. 

While there is no question that Reddit is often biased against the role of the financial advisor, some people believe they provide enough value to warrant using them to help manage and grow money. 

The Question

Adding to the point above, there is no question that Reddit often believes financial advisors, as one comment puts it, “give you advice that sounds very impressive.” To say there is a lot of skepticism in the comment section of this particular post would be an understatement. 

This said, another Redditor points out a very valuable lesson: “No one will care about your money more than you do.” This is spot on and something to consider before investing your money. 

However, a financial advisor might be invaluable for most people who don’t spend hours on Reddit daily or have the time or background to learn about different investment opportunities. 

The Good

One Redditor points out that when he and his then-girlfriend combined their finances, they turned to a financial advisor and got great advice on tax avoidance methods. He emphasizes that he has learned quite a bit, which led this couple to the Fire community. He feels having a third party to help with planning or questions has been great. 

When you consider the other benefits of a financial advisor, like creating a customized long-term strategy that includes your risk tolerance and is built around your specific goals, there is no question that a financial advisor can be beneficial. These individuals are supposed to put your interests above their fees, and good financial advisors will do this. 

It’s an unfortunate reality that Reddit is among the most skeptical. Still, you also have to consider that in posts like this one on r/Fire, you have individuals who are more knowledgeable about the market than laypeople. 

This is why another Redditor points out that “financial advisors can be worth their money” if you need helpful advice on setting up trusts, planning an estate, or tax planning. What if you hate the idea of managing your own money? It’s for these reasons that a financial advisor can be a really great person to have on your side. 

The Bad

One Redditor perhaps best summed up this whole comment section when they noted that a “good financial planner does much more than help pick investments.” What’s challenging about the responses in this Reddit section is that many of these individuals are very happy to put their money in index funds or ETFs and sit back and watch them grow over time. 

This is okay because you are talking about individuals with enough money to make retirement decisions at a younger age. For those who don’t have enough money, a financial advisor can help. However, considering that a financial advisor often takes around 1%, it can amount to thousands of dollars yearly, which is one of Reddit’s biggest frustrations. 

It can be said that it is hard to know if a financial advisor is genuinely qualified to help you. Sure, they might have the right degree and qualifications and work for the right company, but do they truly care about you on a personal level, or is it all about the money? 

Multiple Redditors in the comment section say that they have tried financial advisors before and that their recommendations were nothing they couldn’t have learned by Googling or going on Reddit. For those who want to take the time to educate themselves on financial and tax strategies, a financial advisor may not be necessary, and you can save thousands in the process. 

 

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.