I’m worth $10m and spend almost $400,000 a year. What can a financial advisor really do for me?

A common debate in the finance world is whether a financial advisor is worth the investment or not. This debate came up again in the Fat FIRE Reddit community. A 44-year-old who has a $10 million net worth spends $400,000 per year. He asked the community if this setup warrants him hiring a financial advisor.

He has experience with financial advisors, but neither of them are good. His bank recommended two financial advisor firms, but due to problems with each one, he once again manages his money without an advisor. Redditors jumped into the comments to share their experiences with financial advisors.

Financial Advisors Provide A Personalized Touch

One commenter raved about their financial advisor and explained how the advisor has been useful. Tax optimization, diversified returns, and a de-risked portfolio are some of the advantages the commenter has obtained from working with an advisor.

The advisor prepares taxes directly with a CPA and conducts quarterly meet-ups with the commenter. While you can learn about money management online, financial advisors get to learn more about your specific financial situation and can offer personalized guidance. Furthermore, it can feel like having a friend or a colleague who is guiding you along the way. Money is complex, and not everyone wants to do it alone.

You Have To Find The Right Financial Advisor

Not every financial advisor is equal, and you don’t have to tell that to the original poster. After getting burned by two financial advisors, the Redditor is still holding out. He believes that financial advisors can be valuable, but it comes down to finding the right one.

“I’ve found it much like a psychiatrist. If it’s not the right one for you, it’s worthless. But the right one is priceless,” one commenter responded.

That’s why you should interview every financial advisor. You can narrow the search to financial advisors in your area if you want in-person meetings. However, individuals who are more flexible can reach out to financial advisors who offer remote meetings, even if they aren’t in your area.

Make Sure You Work With A Fiduciary Advisor

Fiduciaries are required to prioritize your best interests. Some financial advisors look out for themselves and only recommend financial products that give them big commissions. Those financial advisors may recommend brokerage accounts and insurance policies that aren’t optimal for your financial needs.

When you interview a financial advisor, always ask them if they are a fiduciary. They should be registered with the SEC or a state as a registered investment advisor. You can also check a financial advisor’s Form ADV. This document will disclose any potential conflicts of interest.

Financial advisors have fees, but it can be a valuable investment if you need help with managing your money. Even if you have a firm grasp over your finances, having someone else stay on top of it can free your mind to focus on other things.

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