5 Things You Should Never Hear from Your Financial Advisor
When you work with a financial advisor, you’re entrusting someone with your financial future, your savings, retirement plans, and long-term security. That relationship should be built on transparency, integrity, and education. Unfortunately, not every advisor operates with those priorities in mind.
There are certain phrases that should immediately raise red flags if you hear them from your financial professional.
Here are five things you should never hear from a financial advisor, and why.
“Performance Is the Only Thing That Matters”
Why it’s a problem:
While returns are important, they aren’t everything. A solid financial plan balances performance with risk, liquidity, tax implications, and alignment with your personal goals. Chasing high returns without regard for volatility, risk tolerance, or your own personal time horizon often leads to poor long-term outcomes.
An advisor who emphasizes performance above all else may be taking unnecessary risks with your portfolio or pushing products that benefit them more than you.
“You Don’t Need to Understand the Details…Just Trust Me”
Why it’s a problem:
Financial advice should empower you, not exclude you. An advisor should take the time to explain strategies, products, and recommendations in terms you can understand. If someone discourages questions or glosses over details, it’s a sign they may be hiding conflicts of interest or unsuitable investments. Or perhaps they simply don’t have the knowledge base and background to address your questions.
You don’t have to be an expert, but you deserve to feel informed and confident about where your money is going and why.
“You Don’t Need a Second Opinion.”
Why it’s a problem:
Any reputable advisor should be comfortable with you seeking a second opinion. In fact, they should welcome it. Financial planning and investment management are significant decisions, and it’s wise to verify that your strategy makes sense from more than one professional perspective.
If an advisor discourages this, it may be because they fear another expert would uncover issues, unnecessary risks, or excessive fees. A good advisor should be happy to see you seek another opinion, and then be happy to address the other advisors perspective, and why they prefer to possibly take a different route.
“This Is a Riskless Investment.”
Why it’s a problem:
There’s no such thing as a risk-free investment. Every financial product involves some form of risk — whether it’s market risk, credit risk, inflation risk, or liquidity risk. Even cash loses purchasing power over time due to inflation.
An advisor who claims an investment is riskless is either uninformed or providing misleading answers. A good financial professional will explain the potential downsides of every strategy and help you manage, rather than ignore those risks.
“Fees Don’t Matter”
Why it’s a problem:
There is a direct connection between the cost of investing and the performance of investments. Suggesting they don’t matter is misleading. That’s not to say that there aren’t acceptable levels of fees for certain products or services. In fact Vanguard has a study that shows that a good financial advisor can add 2-3% to long-term returns in comparison to what the average investor will achieve independtly.
All investment products come with some level of fees. As an example, the use of index funds and ETF’s still come with fees. However, these are nominal by comparison to that of other investment offerings in the marketplace. A good financial advisor is conscious of the cost of these products and will look to minimize them where they can.
A good advisor should also be fully transparent about their compensation. If an advisor brushes off the importance of portfolio expenses, or is not clearly addressing your questions on the topic, they may not be prioritizing your best interests. Investors that need guidance should consider a fee-only advisor that is not biased by hidden costs that will benefit the advisor as opposed to the client.
Your financial advisor should be your partner, educator, and advocate — not a salesperson relying on high pressure sales tactics. If you hear any of these five phrases, it’s time to reevaluate the relationship. Trustworthy financial guidance is built on transparency, open communication, and your best interests at heart.
Remember, it’s your money, your future, and your peace of mind. Don’t settle for less than honest, informed, and thoughtful advice.
