The 5 Financial Advisor Mistakes to Avoid

Financial advisors can be invaluable resources in the areas of planning and investment management. The condition is if you are working with the right advisor in the first place. That’s why it’s so important to avoid these common mistakes when dealing with financial advisors, and only get financial advice you can trust. If you find yourself in any of these situations, consider making some changes to your relationship with your financial advisor or seek out new financial advice altogether.

1) Underestimating costs

While you might think you’ll save money by not investing in a financial advisor near Plant City FL , what most people don’t consider is that financial advising is rarely free. You will likely have to pay a fee for at least some portion of your financial planning or advice. If you want to take matters into your own hands and handle it yourself, be sure you aren’t leaving out any costs—especially hidden ones. For example, if you plan on buying investment funds through an online broker instead of using a financial advisor, make sure you are aware of how much each trade can cost. This can add up quickly over time.

2) Not diversifying investments

If you’re not diversifying your investments, then you’re essentially betting all of your money on one thing—and that’s a lot of pressure. If one part of your portfolio drops, you could be hit hard. Don’t put all your eggs in one basket. Diversify them among several different types of investments like stocks, bonds and cash so that if there is a loss in one type it will be offset by gains elsewhere. Keep risk low by spreading out your portfolio evenly among several different types of assets—or ideally, never making more than 5% percent of your total holdings in any one investment or asset class.

3) Relying too much on the market

As a financial advisor Near Plant City FL, your goal is to help clients reach their goals. When you’re thinking about what that means for your clients, remember that relying too much on stock market returns can be a mistake; instead, look for other investments. Stocks and bonds will always be good bets – but so are real estate and mutual funds. A diversified portfolio is likely better than one filled with stocks alone. If you find yourself leaning toward an all-stock portfolio, stop and think again: diversification is key in creating successful portfolios.

4) Taking Financial Advice from Friends and Family

Putting family and friends in charge of your investments can be a great way to save money on fees while getting some hands-on experience with investing. But you need to be careful. You could end up paying a price (literally) if they don’t have your best interests at heart. First, decide whether you’re comfortable giving your advisor power of attorney (POA) over your accounts. If you’re not, consider hiring a professional instead. POA is sometimes necessary for advisors who also serve as financial planners or financial consultants. If someone comes out of nowhere and starts asking for control over your finances, run for the hills!

5) Failing to communicate with your accountant

An accountant isn’t just a person who handles your finances—he or she is an important part of your team. If you don’t communicate with them, they may not be fully aware of everything that’s going on with your business . You may find yourself in a bad situation without knowing how it got there. Make sure you are clear about your goals and expectations for taxes or bookkeeping. Your accountant should help strategize ways for managing certain expenses throughout the year. Moreover, advising whether certain income sources are worth pursuing; likewise, he or she should keep you updated about changes in tax laws and accounting rules that may impact how you do business moving forward.


If you’re like most people, you don’t have the time or knowledge to properly take care of your finances. This leaves you at risk of either under-saving or overspending and thus losing out on a big chunk of your earnings. This is where a financial advisor can help. A good financial advisor will not only help you set up your budget, but they’ll also explain financial concepts and strategies in ways that even non-business savvy people can understand so that you can fully benefit from all your hard work.

Zuhair Mujahid

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