What Most Financial Advisors Don't Want You To Know
THE QUICK & DIRTY
Tired of feeling lost in the financial world? Many advisors prioritize selling products over building a plan aligned with your goals. This post exposes the secrets Wall Street doesn't want you to know, empowering you to take control and achieve your financial dreams. Learn how to ditch the jargon, avoid costly mistakes, and build real wealth.
KEY TAKEAWAYS
Prioritize a comprehensive financial plan that outlines your goals and guides your investment decisions, rather than solely focusing on investment products.
Seek out a fiduciary financial advisor who is legally obligated to put your best interests first and avoid those with potential conflicts of interest.
Remember that "time in the market" generally beats "timing the market," so avoid impulsive trading and focus on long-term investment strategies.
Ever feel like you missed the boat on learning the language of money? Like you're navigating the financial world with a tattered map and a rusty compass while everyone else seems to have a GPS? You're not alone.
It's time to lift the curtain on Wall Street and expose the secrets most financial advisors don't want you to know. Why the secrecy? Because transparency and clarity are often missing from the financial world. But it doesn't have to be that way. I'm here to decode the jargon, cut through the BS, and empower you to take control of your money.
Starting with a Financial Plan is Most Important
Walk into a typical financial advisor's office (or Zoom room these days), and chances are you won't see the words "financial plan" anywhere. That's because most advisors are more focused on investment products than understanding your goals. But how can they steer your money in the right direction if they don't even know where you're going?
Investing without a clear purpose in mind is like setting sail without a destination. "Building wealth" isn't a goal, it's a vague aspiration. How do you measure progress? Is a million dollars enough? Five million? Fifteen million? But if you're investing to buy a mountain home in six years, that's a concrete goal. Suddenly, your investment choices have a clear purpose.
What they don't want you to know
Most advisors won't tell you this, but financial planning must come first. It helps you define your goals, track your progress, and make informed decisions—whether you're working with an advisor or going solo. Prudent investing begins with knowing exactly what you're investing for and how long you have before you want to hit that goal.
Their Advice is Outdated
Many financial advisors learned the ropes in a pre-internet, pre-globalization world. Their teachers likely lived through world wars and economic depressions, instilling a scarcity mindset that shaped their entire approach to money.
While your grandparents probably prioritized stability and security above all else, just because they bought CDs doesn’t mean you should. You're a modern professional with different dreams and a different worldview. Here's the kicker: this outdated mindset is often passed down. Even younger advisors may be unknowingly perpetuating these old-school approaches, simply because that's what they were taught. A good advisor asks you what kind of home you want to buy. A great advisor asks you why you’re buying the home in the first place to ensure it aligns with your core values and larger goals.
What they don't want you to know:
"Old-school" thinking can lead to advice that's:
Overly conservative: They might push "safe" investments that barely keep pace with inflation, leaving you feeling like you're treading water instead of building wealth.
Resistant to new ideas: They might dismiss innovative strategies or technologies, clinging to outdated models that no longer serve the modern investor.
Out of touch with your goals: They might prioritize wealth preservation over wealth building, failing to recognize your ambition and desire for growth.
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The Myth of Timing the Market
Wall Street wants you glued to the ticker, emotionally invested, buying and selling at every twist and turn. That's how they win. So they flood the news with endless market chatter, creating drama where there often is none. Ever notice how there's ALWAYS something to talk about on CNBC?
While Wall Street thrives on constant trading and fleeting trends, history shows us that the most successful investors (Mr. Buffett included) take a different approach. They understand the power of "buy and hold"—a strategy that focuses on long-term growth and stability.
The truth is, "time in the market" beats "timing the market." The problem? There’s not as much money to be made when you ignore the noise (and news!).
What they don’t want you to know
The best way to build long-term wealth is to ignore the noise, stay focused on your goals, and resist the urge to constantly tinker with your investments.
“Beating the Market" is Extremely Difficult (and Often Unnecessary)
Many financial advisors love to brag about their access to the "best" actively managed funds. They make it sound like an exclusive club with a hefty price tag (which it is). But are those fancy fund managers really worth it? Not according to the stats. The truth is, most actively managed funds underperform the market— a whopping 90% of the time!
What they don’t want you to know
Nine times out of ten, a simple, diversified portfolio of ETFs (Exchange Traded Funds) can achieve your financial goals without the added risk and expense of active management. ETFs offer everything you need: transparency, liquidity, and low fees. Plus, you don't have to worry about picking the "right" fund manager. But here's the catch: if investing was that easy (and it is!), your financial advisor wouldn't have much to dazzle you with, would they?
Most Aren’t Required To Have Your Best Interests at Heart
Not all financial advisors are fiduciaries, meaning they're not legally obligated to put your interests first. Some advisors might recommend products that earn them higher commissions, even if there are better options available for you. It’s known as the suitability standard, and more financial advisors than you think practice under it. In fact, if your advisor works at a major broker/dealer, like Morgan Stanley, UBS, JP Morgan, etc., and DOES NOT hold the CFP® designation, it’s likely they are not a fiduciary.
What they don’t want you to know
It's crucial to ask your advisor if they operated under the fiduciary standard and to understand how they are compensated to ensure their incentives align with yours.
Your Risk Tolerance Isn't Fixed
Risk tolerance questionnaires are often used to determine your investment strategy, but your risk tolerance can, and should, change over time depending on your circumstances and goals. Relying solely on a one-time risk assessment can lead to a mismatched portfolio and missed opportunities. This is where goals-based investing comes in. Instead of fixating on your risk tolerance, it prioritizes your objectives.
What they don't want you to know
Your investment strategy should be flexible and adapt to your evolving needs and goals, not solely based on a one-time assessment that you completed when you opened an account.
The Bottom Line
The financial world can feel like a maze of confusing jargon and hidden agendas. By understanding the secrets most financial advisors don't want you to know, you can take control of your financial future, make informed decisions, and achieve your goals with confidence. Remember, your financial journey is unique. Find advice and strategies that reflect your individual needs and aspirations.
Whether you’re saving up for Tahiti or a Tesla, we help you achieve your short-term and long-term financial goals.
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Written by Priya Malani
Founder & CEO
Priya is an industry thought leader and personal finance expert for HENRYs [High Earners, Not Rich Yet]. Her relatable, no-bullshit style has garnered attention from the largest media outlets in the country including Forbes, The Wall Street Journal, Business Insider, NerdWallet, and more.