Users' questions 

Do you have to be a financial advisor to give financial advice?

Leia Doyle

Do you have to be a financial advisor to give financial advice?

Technically, that means generalist financial advice, or even comprehensive financial planning, doesn’t necessarily trigger a requirement to register as an investment adviser and get the license, if you give no specific advice about investments.

Is it worth paying for a financial advisor?

The Vanguard Investments study found that financial advisers could add a potential 3% increase in net returns for their clients through a combination of sourcing lower cost investment tools, managing asset allocation, helping clients devise and stick to a financial plan, and other tactics.

Can a financial advisor make you rich?

If an advisor works with a client who has $500,000 to invest, they could make up to $10,000 in revenue from a single client. The advisor could make 25 times more money working with a client with $500,000 than a client with $19,000.

Are financial advisors a ripoff?

If an advisor offers or guarantees returns higher than 12-15%, it is likely a scam. For example, over the last 85 years, the U.S. stock market has averaged approximately 9.5%. This return is not a “safe” return, but quite volatile, meaning there were many negative return years over the decades.

Can you be held liable for financial advice?

In general, individuals do not have a case against financial advisors if they lose money based on their advisor’s recommendations. In other words, they cannot be held liable for simply making recommendations or informing clients of their choices.

Can a financial planner give tax advice?

Typically, financial advisors work with their clients on specific tax issues, but they can also engage in tax preparation services. Financial advisors typically gain insight into each client’s financial goals and unique situations, and only then do they provide advice on tax planning and tax preparation.

When Should I dump my financial advisor?

Key Takeaways

  • Consider changing your financial advisor if you are unhappy with weak portfolio performance or if you have difficulty with your existing financial professional.
  • Find out how your current firm handles transfers and whether your fees will be prorated.