20 Secrets Financial Advisors Don’t Always Tell You

Do yourself a favor and learn these, so financial advisors won't underestimate you.

Cyra Sanchez
January 31, 2025
6 min read

20 Secrets Financial Advisors Don’t Always Tell You — Antoni Shkraba on Pexels

Some advisors may fail to mention fees, commissions, or conflicts of interest that could affect their recommendations. Others put their firm’s profits ahead of their client’s best interests, selling expensive products that are not necessarily in their client’s best interest. It’s important to inquire about fee structures and seek fiduciary advisors who are legally required to act in your interest.

1. Not All Advisors Are Fiduciaries

Antoni Shkraba on Pexels

Ever wonder whether your advisor is really on your side? Some advisors may not be legally required to act in your best interests, which could create a conflict of interest. Choosing a fiduciary means that your financial well-being is your highest priority.

2. Fees Can Be Sneaky

Mikhail Nilov on Pexels

Do you think you’re receiving advice for free? Many advisors receive commissions from the products they recommend, and those products may not always be in your best interest. Hence, knowing how they get paid can give you a better understanding of how to make well-informed decisions.

3. You Don’t Need to Stick with a Local Advisor

Tima Miroshnichenko on Pexels

In this era of digital messaging, your advisor doesn’t have to be right down the street. Thanks to virtual meetings, you can now work with professionals from across the country when seeking the right fit for you. But widening your search can open you to better advice and lower fees.

4. Following Your Advisor to a New Firm Might Not Be Beneficial

Kampus Production on Pexels

When advisors change firms, following them is not always in your best interest. They may be driven by new commissions, which can disrupt your portfolio for no reason. This should always be your consideration before making any move.

5. Do Your Own Research Before Hiring an Advisor

Ron Lach on Pexels

Trust is good, but verification is even better. Not all advisors are created equal, and it is important to vet their credentials, fee structure, and investment philosophies to see if they match your objectives. Doing some homework upfront can pay off big time down the road.

6. Financial Jargon Can Obscure Understanding

George Morina on Pexels

Ever feel as if your advisor is speaking in a foreign tongue? Complex terms can, at times, obscure an investment’s true nature. If something isn’t clear, ask. Knowledge brings empowerment and wise choices.

7. Past Performance Doesn’t Guarantee Future Results

Kampus Production on Pexels

That shiny track record your advisor tells you about? It’s not a crystal ball. Markets are fickle things; just because something worked out for you before doesn’t mean it’ll work out for you again. This is why diversification and risk assessment are important.

8. High Returns Often Come with High Risks

Gustavo Fring on Pexels

If it seems too good to be true, it likely is. Seeking high returns can lead you to risk potential destruction with little reward. A balanced strategy reflective of your risk appetite often works best over the long term.

9. Tax Implications Aren’t Always Discussed

Mikhail Nilov on Pexels

It might look cute on paper, but what’s the tax implication of that investment? When tax liabilities are at stake, advisors may not always pay attention to these issues, which can eat away your profits. Thinking ahead with your tax considerations could save you a lot of money.

10. Estate Planning Isn’t Just for the Wealthy

RDNE Stock project on Pexels

Ever think estate planning isn’t for millionaires? Think again. No matter how big your net worth is, having a plan through a will (or a trust) ensures your assets are distributed according to your wishes. This helps to avoid potential disputes.

11. Emergency Funds Are Essential

olia danilevich on Pexels

Have you established your safety net before even looking into investments? This serves as an emergency fund that can cover unexpected expenses and prevents you from needing to touch long-term investments too early. It’s the bedrock of sound financial planning.

12. Retirement Planning Should Start Early

Kampus Production on Pexels

Procrastination is expensive. You benefit from compounding interest the earlier you start saving for retirement. Even modest gifts can grow dramatically over long periods.

13. Not All Financial Products Are Necessary

Tima Miroshnichenko on Pexels

That shiny new financial product your adviser is talking about may not be needed for your portfolio. It may even serve their commissions more than your wealth. Sometimes, the most straightforward investments are the best.

14. Regular Portfolio Reviews Are Crucial

Photo By: Kaboompics.com on Pexels

Set it and forget it? Not quite. Regularly review your portfolio to ensure it remains aligned with your goals. Also, make any necessary adjustments.

15. Debt Management Plays a Key Role in Financial Health

Nicola Barts on Pexels

Investments are very important, but managing and reducing debt is just as important. Debts that have high interest can corrode your wealth faster than investments can develop it. This creates superior financial results, debt, and investing in balance.

16. Financial Education Empowers Better Decisions

RDNE Stock project on Pexels

Knowledge is power. The more you know about financial principles, the less you get trapped in getting-rich-quick schemes. Investing time in educating yourself can ultimately pay dividends.

17. Aligning Investments with Personal Values Is Possible

Yan Krukau on Pexels

Want to save the planet and make money doing it? With socially responsible investing, you can ensure your portfolio reflects your values while still achieving returns. Never forget that big business is all about people, and choosing companies that align with your morals can pay off in dividends, both financially and personally.

18. Life Changes Necessitate Financial Plan Adjustments

Anna Nekrashevich on Pexels

Want to get married, have a child, or change jobs? Events that involve large sums or your overall balance sheet of money can change your financial objectives and tactics. Regularly updating your financial plan will ensure it is relevant to your current financial situation.

19. Diversification Isn’t Just About Different Stocks

RDNE Stock project on Pexels

Do you believe you’re diversified because you own different stocks? Real diversification includes a combination of asset classes such as bonds, real estate, and alternative investments, which can help decrease this risk. A diverse portfolio offers greater stability in a shaky market.

20. Advisors Aren’t Always Proactive About Reviewing Your Plan

Yan Krukau on Pexels

If you don’t ask, they may not notify you about when changes are needed. Some advisers prioritize prospective clients over existing ones. You could also stay involved with your financial plan and schedule regular reviews so that your investments stay on track.