What the Heck is a Financial Advisor Anyway?

Do you find yourself feeling confused about what a financial advisor actually does? Don’t worry! You’re not alone. I’m a financial advisor and it took me years to answer this question myself. With this article I hope to throw back the curtain and show you exactly what an advisor is, or should be…

This story starts in the fall of 2010 in the seaside city of Costa Mesa, California. The Deepwater Horizon spill was happening in the Gulf of Mexico, Kesha had just released TikTok, and a kid in a grey suit was walking down a sidewalk wiping sweat from his brow. While it was fall everywhere else in the country, California hadn’t gotten the memo yet.

He’d eaten a big breakfast, stuffed his pockets full of investment pamphlets, and began walking door to door, talking to anyone that would listen about investments. This was his first day as a financial advisor. After a dozen slammed doors and a close encounter with a dog he’d given up and was walking back to his car, a beat up green Mazda Tribute, when he heard a siren and saw blue lights flashing behind him. Apparently one of the neighbors was confused as to why a man in a suit had been walking up and down the neighborhood and had called the police to investigate. The officer was confused as to why a financial advisor would be going door to door like a vacuum salesman. The kid was too. It had all made so much sense when his employer told him this was how to build a business. He’d presented numbers, fancy spreadsheets, and given examples of successful advisors who had started this way. But now the kid was starting to have his doubts.

That kid was me. And that’s how I started my career as a financial advisor.    

What Comes to Mind When You Hear the Term “Financial Advisor?”

Many people think about investing and for a lot of advisors that’s true. They have fancy offices, no desire to work with people who don’t have $250,000 or more to invest, and love using spreadsheets with lots of numbers. The more numbers the better. But that’s not even close to the full picture of what an advisor can do for you. I’m not a bit surprised about all the confusion over what a financial advisor actually is. I’m a Financial Advisor and it took me an embarrassingly long time to figure out what it is that I do too.

Like many people in our business I started out thinking that being an advisor meant investing client’s money. My career began  by walking door to door pitching stocks to anyone that actually answered the door. My superiors told me this was because a business should be built face to face with a firm handshake. But this experience left me feeling more like a salesman than an advisor, and still unsure about how much pressure to apply for the perfect handshake. At least with Coronavirus I don’t have to worry about that anymore.

After leaving my job as a door to door investment salesman, I began working for a large national bank as a financial advisor. It was here that I was introduced to the concept of “financial planning.” At this company that meant if you let me sell you a mutual fund, I would throw in a 50-page document telling you if you could or couldn’t retire. I stayed here for around three years before moving on.

My next stop led me to a regional investment firm in St Louis, where I joined a group of planners whose only job was to build financial plans for clients. No more selling investments for me, thank you very much. I was on to bigger and better things…putting together financial “plans” that were robust. They included retirement, estate, tax and insurance analyses.

Our recommendations were straightforward. If your plan said you couldn’t retire? Easy, our advice was to just save more, spend less, or retire later. Fine, right? We saw no need to follow that up with how in the world to actually do that. It’s hard to save more when you have to buy hockey pads for your kids and your house needs a new roof, right? At the end of the day, even though I wasn’t selling investments anymore, I was doing basically the same thing I did at my previous job…handing people a thick packet of paper that said you can either retire, or you can’t, and that was that.

But Is That What Financial Planning Really Is? I Don’t Think So.

What about the people who don’t plan to retire? Or those who just want to get out of debt? How about the family that wants to send their kids to college while still being able to take family vacations? Or the people who need to buy a new hot water heater, the people that want to give money to charity, or the ones who just want to figure out WHAT they are supposed to be doing with their money.

There is so much more to life than saving for retirement. A lot more. In fact, some of our happiest clients are the ones who are still working in “retirement”. And those that are simultaneously saving for the future, and spending in the present seem to be enjoying life just as much.

What I am saying is this; one day I woke up and realized that wearing a suit, working in a fancy glass-walled office, selling stocks and bonds and throwing in complimentary retirement plans did not make me a Financial Advisor. And I wasn’t doing anyone, myself especially, any favors by pretending otherwise.

But here’s what does, and it has nothing to do with investing your money…or at least very little to do with investing your money. It’s the reason why my wife and I started Oakview in 2018.

When client’s sit in our office the first question I always ask is, “what can I help you with?”

Responses vary but they are almost always one of the following:

I need to get out of debt.

I need to know how much money I should be saving.

I want to send my kids to college.

I want to save money on taxes.

I don’t know why I’m here. I just know I need to be doing better with my money.

In the old days my response would have been:

You want to get out of debt? Great! Payoff your highest interest debt first. And then let’s talk about your investments.

You want to save more? Good. You should be saving at least 15% of your income. Now let’s talk about your investments.

Paying for your kids’ college is a wonderful goal. You should set up a 529 plan. And then we should talk about your investments.

You want to save money on taxes? Me too. You should see an accountant. But before that, let’s talk about your investments.

Did you notice something there? Everything circled back to investments as that was the only way I got paid. But now, thankfully, I have Oakview. And selling isn’t how I get paid anymore. I don’t have account minimums, I don’t have a quota to meet, and I definitely don’t have to wear a suit.

Now my responses look more like this:

You want to get out of debt? Wonderful. Let’s talk about your goals for this money and put together a plan that fits your lifestyle to get you out of debt quickly while freeing up as much money as possible so you can live a rich life now.

You want to save more? Let’s talk about your goals for these savings and decide together how much you need to save to meet those goals.

Paying for your kids’ college is a wonderful goal. Let’s talk about your goals for your children’s education, look at available tax deductions and student aid options, and see what resources are available for you.

You want to save money on taxes? I love that. Let’s talk about your goals and analyze your tax return to see what options you have.

Did you notice something there? All of my responses were centered around finding out what your goals are. In other words, what you want so that you can feel like you are living your life to the fullest now. Selling you a product has nothing to do with that.

Put simply, a financial advisor is someone that helps you achieve your goals. Whether it’s getting out of debt, sending your kids to college, or figuring out a way for you to retire in your 40’s and move to Fiji; a financial advisor is someone who collaborates with you to realize these dreams.

Now, that’s all well and good but how the heck do I know if my advisor can do that for me? Easy. When you are looking for a Financial Advisor run through the following scenario…

Let's assume that you've decided to work with this advisor and let's look five years into the future. You're sitting in their office and looking back over everything you've accomplished together. What would need to have happened over those five years for you to feel like what your advisor did was a success?

It’s that easy. If your advisor can help get you to that place then you’ve chosen wisely. If they can’t, then maybe it’s time for a change.