Season 3, Episode 3: "I Want To Hire a Financial Advisor. Can They Be Trusted, or Are They Full of Shit?"

Season 3, Episode 3: “I Want To Hire a Financial Advisor. Can They Be Trusted, or Are They Full of Shit?”

It is a truth universally acknowledged that sitting next to a chatty person on an airplane is the fastest way to come to hate them and everything about them. Which is exactly what happened when I was once seated next to a financial advisor on a plane.

Suffice it to say, my opinion of financial advisors has always been rather… skeptical. I’ve never been fully convinced of their worth to the average person. I can see why they might be useful to someone with lots of fat stacks! Or to someone facing bankruptcy. But to those of us who fall somewhere in between? Nah.

Which is why I’m delighted to share that this week’s episode of the Bitches Get Riches podcast changed my mind in real time. Listen in as Kitty broadens my horizons and we discuss the true benefits of a solid financial advisor.

Me, having my whole mind changed about hiring a financial advisor.

This week’s question

This week’s question comes to us from Piggy’s dear friend Meg. Meg asks:

“Do you have any advice for little boos on what to look for in a financial advisor, what to expect from one, and when/if it makes sense to hire one? I’m in nursing school right now, but once I start my new career, is it worthwhile to see an advisor early on? Or is it too expensive to be worth it until you have at least a couple of stacks?”

– Meg, uncanonized patron saint of curiosity and lifelong learning

Our answer

Here’s more of what we have to say about financial planning and making money decisions:

Bitch Nation, our Patreon donors are the reason for the season. This is because they fund 100% of the production of our podcast! So if you liked this week’s episode and you want to help us keep answering questions like this, consider joining their ranks! For as little as $1 a month, you can get access to all kinds of exclusive Bitch content, and have a say in what we write and record. FEEL THE POWER.

Episode transcript (click to reveal)

Kitty 0:00

This episode, like all episodes, is brought to you by our Patreon donors. So this time, thanks go to Stephanie, Rachel, Kayla, Sasstronaut, Ashlee, Lily, Meera, Erica, Ellah-sed, Hannah, Carlie, Jessica, and Your New Apartment. And an extra-special thanks to: Elizabeth, Marianna, and Samantha. I have it on good authority that the three of you went on a joyride in a 1961 Lincoln Continental, chucking flaming bags of dog shit onto Jeff Bezos’s private helipad. Elizabeth, Marianna, and Samantha: thank you for performing this service to our nation, and thanks for being our Patreon donors.

Theme Song 0:43

If you need some dough
You don’t know where to go
In this patriarchal capitalist hellscape

Well here’s the ‘sitch
We’re gonna help you, sis
Because bitches get riches

Bitches get riches
Bitches get riches
Bitches get riches
And so can you

Piggy 1:14

My local neighborhood brewery, I love it so much and the beer is so good. But during COVID, the part-owner and head brewer, who happens to be the only owner/head brewer who is a lesbian in this state, needed to buy out her partners. So my husband and I invested in her and now we’re investors in a  brewery and it’s fucking amazing, and on things like canning day I can go and I can help can beer. So I have a lot of good beer in my life.

Kitty 1:41

So what you’re saying is, you feel entitled to walk onto this property and just stand with your mouth open under all the spigots—

Piggy 1:50

All the taps, if you will.

Kitty 1:51

And just go glug-glug-glug-glug-glug. That’s all I’m picturing.

Piggy 1:54

I mean, no. Because I’m not coordinated enough to swallow while my head is upside down. Anyway, I’m Piggy.

Kitty 2:02

I’m Kitty.

Piggy 2:03

We’re the bitches in Bitches Get Riches.

Kitty 2:06

We’re the owners, founders, and proprietesses of the world-famous Beer Train!

Piggy 2:13

Home of the Ribeye on a Stick!

Kitty 2:15

But our time on this planet is limited.

Piggy 2:17

So let’s get started.

Kitty 2:19

Today’s letter comes to us from Piggy’s good judy Meg. Meg asks: Do you have any advice for little boos about what to look for in a financial advisor, what to expect from one, when and if it makes sense to hire one? I’m in nursing school right now, but once I start my new career, is it worthwhile for me to see an advisor early on? Or is it too expensive to be worth it until you have at least a couple of stacks?

Piggy 2:42

I suspect we’re going to have opposing opinions on this one. I don’t see a lot of value in a financial advisor until you have, in Meg’s words, at least a couple of stacks.

Kitty 2:55

Interesting. I disagree, but tell me about why your opinion is your opinion.

Piggy 3:01

If you’ve ever struck up a conversation, or been forced into a conversation with the person sitting next to you on a plane, then you know that it’s the fastest way to hate them and everything about them. Or maybe that’s just me!

Kitty 3:13

No, I completely agree with that. Anyone who sat next to me would absolutely come away hating anything I represented.

Piggy 3:20

I sat next to a financial advisor on a plane once. And what she basically told me was she makes it up as she goes along. She has subscriptions to stuff that the average consumer can also get access to, and she just recycles that advice for her clients. So that made me feel like huh, if I can access that information for myself, then do I really need someone to professionally advise me on it.

The other reason I am not super wild about financial advisors is because my dad is, bless his heart, fucking in love with his financial advisor. His name is Brian, the advisor, not my dad, and when Bear and I were considering buying a house my dad was like, promise me you’ll talk to Brian first. And I was like why should I talk to Brian? And he was like, he’s a financial advisor! He can tell you if you’re ready to buy a house. And he can tell you what you should do with your money. And by this point I was already…pretty good at money. Like we were starting to plan Bitches Get Riches, maybe you’ve heard of it. So we met with Brian and it was the most uninformative conversation ever. It was so basic that I was like I got all this information from doing my own homework. I guess what I’m saying is my personal experience with financial advisors has not been super positive and I’m excited for you to prove me wrong.

Kitty 4:49

I mean I don’t know if I can or would prove you wrong. I think those are valid experiences, and I think it’s important that people have an understanding that just because you’re reaching out to a financial advisor doesn’t mean it’s going to be like a fairy godmother who shows up and just starts waving magic wands around.

Piggy 5:05

God, if only.

Kitty 5:06

So I have used a financial advisor once. And it was just before I was getting married. I was coming up on the end of paying off my student loans and reaching a total net worth of zero. And I wanted to chat with a professional. I wanted a little bit of external validation that the plan that I had built was a good one. I already felt a pretty strong degree of confidence. However, if I had been wrong about what I was doing, it could have cost me many, many hundreds of hours spent working hard for those paychecks. And I was very lucky to run into someone who was quite young herself and had gotten into the field because she felt very passionately about helping people exactly like myself. She was not interested in being a highly paid wealth manager for people—taking people who were millionaires and turning them into billionaires, that was not her interest.

Piggy 5:58

Nice.

Kitty 5:59

She wanted to help regular folks and so she was thrilled to talk to us and really excited that we were reaching out to her at exactly the point that we did where we were kind of—we have successfully worked hard enough and knew just enough to make ourselves into blank slates. Where do we go from here? That was a question she was so excited to answer.

Piggy 6:20

See, that sounds like a truly inspiring person. I’ve always had the impression that like you had to have hundreds of thousands if not a million dollars for them to even look at you. In Meg’s situation, she just got out of nursing school, so she’s looking at an empty retirement account basically, and a lot of student loan debt.

Kitty 6:42

So If I were in this situation, and I sort of have been, basically what I was able to do with my financial planner is I brought to her my dreams for myself for the next 5 or 10 years. And said right now, I’m about to finish paying off my student loans, I’m going to have a net worth of zero. Here’s what my income is, here’s how I feel about my career, in terms of do I hate every second of it and I want to get out or am I fine with doing this and I see a lot of growth potential and I think I’ll be making double the amount that I’m making this year in a few years. Just giving her a grounding in my industry and how I feel about it. And then saying my goals for myself are I really want to own my own home. I really want to one day get to the point where I’m able to make work an optional part of my life. I don’t plan on having children. I do plan on having an inappropriate number of pets.

Piggy 7:40

An inappropriate number of pets, it’s just—it’s very you.

Kitty 7:42

A socially unacceptable number of pets. Help me see the reality of my situation. I’m sure it was a couple hours of work and I think it cost me less than $300. And in the grand scheme of things, that was very affordable, even if the only answer that she got back to me was you’ve made really great choices and you’re doing a great job. That peace of mind to me was worth the 300 bucks. To go forward and feel like I described to her my 5 year plan and she gave me a big ol’ thumbs up. And just getting that from a professional made me feel much more at ease with the decision that I was making that I was on the right track.

I think the main difference between financial advisors. There’s CFAs and CFPs.

Piggy 8:28

That’s certified financial…accountant?

Kitty 8:31

Analyst versus planner, I think is how that acronym lands.

Piggy 8:37

Got it.

Kitty 8:38

So my understanding is that a CFA is really focused on large-scale wealth accumulation, these are the people who are representing large funds or who work for large companies, or maybe work for uber wealthy individuals who run all of their businesses through shell corporations, those sorts of people. Whereas a CFP is someone who helps individuals. And there’s also a very important distinction where some financial professionals work based on commission, where they’re selling you particular products or particular services and they are getting money as a kickback for doing that. There’s nothing wrong with that, if you are upfront about it. However, I would never ever ever recommend that any BGR listener ever goes to a commission-based financial professional, because they do not have your best interests at heart.

Piggy 9:36

Yeah, let me drive that point home. There’s something called the fiduciary law. So the fiduciary law means that if you are a financial planner or a financial analyst you must recommend to your clients what is in their best interest regardless of how it reflects on you or your company. So if a financial advisor is not a fiduciary, in other words they do make money on commission for what financial products they sell you, they cannot be trusted. Because they are going to recommend you, most likely, financial products that are going to line their own pockets, regardless of whether or not it’s the best choice for you. So if you do decide to go with a CFA or a CPA, make sure that they are also a fiduciary.

Kitty 10:20

They are also commonly called fee-only. Fee-only is good. If I’m charging you $100, you’re getting 1 hour of my advice time and that’s the only financial transaction that’s happening. As opposed to I’m going to charge you an hourly rate to sell you, I don’t know, a Wells Fargo financial product and I’m also getting money from Wells Fargo. So when they say fee-only, it means I’m paying you an hourly fee or a set rate for your advice and that’s it.

Piggy 10:48

Exactly. Exactly.

Kitty 10:49

Getting to Meg’s question, my feeling is that if you come to the right kind of financial planner with the right kinds of questions, they might be incredibly powerful allies who will set you straight on stuff, and help you build a long-term plan that’s going to really work for you. But if you go to the wrong kind of financial planner and you don’t know what kinds of questions you should be asking from them, I think that’s a great way to waste your money and your time.

Piggy 11:20

I think that’s an excellent point.

Kitty 11:22

I feel like the best time to visit a financial professional isn’t like every month, rather I think every year or maybe at every major milestone, they may be able to help you identify a bunch of stuff, a bunch of investment opportunities maybe, that are unique to your situation. So for example, let’s say you work right now but you have mental health struggles where sometimes working is really difficult and other times it’s really doable. A financial planner would be a great person for you to talk to because they might help you put together a strategy to develop investments that would be safe if you ever had to go on disability, that couldn’t count against you.

Piggy 12:10

That’s a really good point.

Kitty 12:12

But I also see your perspective where if you’re an average person who currently has very modest income, I do think it is not helpful for you to visit a certified financial professional if your main problem is I don’t have any money. And I think that is where a lot of our readers may still find themselves.

Piggy 12:36

Absolutely, cause the answer there is just like make some money. So I’ve been approaching this question like you should only have a CFA or CFP if you have a ton of money to work with. But now I’m realizing that the opposite is also true. If you’re in a lot of financial trouble, there are a lot of laws and policies that can work for you if only you have the knowledge and education to take advantage of them. And a financial planner could help with that.

Kitty 13:05

It’s so true that finance varies a ton from state to state. If you’re asking me a super specific question, an answer in California could be completely different from an answer in Vermont. So having someone with that degree of knowledge nearby is extraordinarily helpful and really not something to google your way through because the risks are too great. Tax penalties or something terrible like that. And I think it’s not just being in a state of financial hardship, but rather I think financial planners can’t figure out how to help you make more money. They can’t be career coaches, or I don’t think they should be. But rather whether you have a lot of money or a little bit of money, if you’re unclear about how to connect the life goals that you have to the amount of money that you do have, that’s where a financial planner can really help. Say for example that your life goal is you want to have a big family. You love kids and you want to have a bunch of them. Children are expensive—

Piggy 14:11

And delicious.

Kitty 14:13

Wah-wah. Contacting a CFP would be a really good idea for you, I think, because there are so many tax implications. There are so many unique ways that you can save money for children, for healthcare expenses, the accumulated knowledge of rich people about back-door ways to invest. If you are maybe a little bit older and you spent the first few decades of your career working in a field that didn’t pay very well and you’re super behind on your retirement savings, something that requires that degree of specificity I think is an excellent person to reach out to.

Piggy 14:54

Absolutely, 100%. I think the value in going to a professional is you need to visit the right person for the job. And if you want career coaching, go to a fucking career coach. If you want to know what to do with your investments, how to get out of debt, that’s stuff that goes to a financial planner.

Kitty 15:16

Even as I said they’re not the people you go to for things like career coaching, I will say the CFP that we went to was the first person to explain to my partner the reality that his business had inappropriately classified him as an independent contractor when he was in reality an employee. And even though I would not say that that was career counseling, in addition to letting you know there are cool tax loopholes that only rich people know about where you can invest in an HSA and grow that income tax-free, blah blah blah. There’s those sorts of things, sure. But also a really good CFP can also alert you to situations like that where I think you’re being taken advantage of and maybe I can not fix that problem but I can at least let you know that it exists and let you choose what to do next.

Piggy 16:14

We’ll have to talk about the gig economy at some point and how predatory it is and why it’s so problematic that people are hired as independent contractors when they’re basically employees, but that’s the company covering its ass and dressing it up as have a flexible work schedule and be your own boss! And also have zero fucking protection.

Kitty 16:38

It’s all bullshit.

Piggy 16:40

Yeah.

Kitty 16:41

We have talked about that, but also we love nothing so much as repeating ourselves, so we’re happy to talk about that more.

Piggy 16:46

You know what, listen there are 3 pieces of financial advice and we’ve said them all millions of times.

Kitty 16:54

Make more money. Spend less money. Guillotine more billionaires.

Piggy 17:00

Yeah, guillotine the billionaires. Exactly. There’s probably a lot of people out there like Meg who have money and can see a path forward into a financially comfortable future ahead of them for the first time in their lives, and that can be really daunting and intimidating. We get questions all the time where people are like I have money now, what do?

Kitty 17:22

Yes! Honestly, one of our most popular questions is some variation on that.

Piggy 17:28

Exactly, and I want to be really sensitive to those people because it can be really intimidating and it can be very scary to be like well I don’t want to fuck this up, but also I need an impartial judge to help me make these decisions. So if you’re feeling like that, that’s another great reason to get a financial planner involved.

Kitty 17:50

You started all of this by saying this person said I make it all up as I go. And what I actually wonder there, I bet that has a lot less to do with how legitimate the entire industry of professionals is, I wonder if this is more an example of a woman in a financial field, which is a very traditionally male-dominated field, expressing to you her general feeling of imposter syndrome.

Piggy 18:20

That is incredibly valid.

Kitty 18:22

There’s nothing special about what I do, I just read about stuff and tell people about it. But the reality is, I have the ability to learn to do anything. It’s just how much of my life do I want to spend trying to develop the kind of confidence that one can only get from doing this as a profession. And at the end of the day, I’m like sure I’ll tile my own floor but I am not wiring my own electrical because I might electrocute my ass and I’m not in the mood for that today. And I think that’s how finance is!

Piggy 18:55

God, you have completely changed my mind on this question!

Kitty 18:58

I love this!

Piggy 18:59

This is amazing.

Kitty 19:00

We know so many people in this industry who are certified as CFPs and those people take their ethics really seriously and they take their jobs and their clients really seriously. They’re people who get into money because they like people, and that’s a valuable person to know. I do think though, it’s important that you find the right person.

Piggy 19:21

Again. I have a new job. At a financial media and advice company, The Motley Fool. Obviously they don’t pay us to say this, but I will say that them, and their competitors, any other large bank or brokerage firm is going to have a financial planner or advisor on staff. And again, you want to be like are you a fiduciary? And if they say no, you want to run for the hills. But it’s pretty easy to pick the large bank or brokerage firm or financial media company of your choice, call them up, and get a financial advisor.

That said, I think if you’re going to go that route, be sure that you are going in with eyes wide open and you understand that, if this is a large bank, the only products that they’re probably going to recommend to you are from that bank. The only investing vehicles they’re going to recommend you are from their brokerage firm. So just keep in mind where people’s loyalties lay. I’m sure with a little more digging it might be easier to find an independent financial planning firm in your locality. Emphasis on the local there, because states have differing laws, rules vary from state to state. If you are trying to declare bankruptcy in Wisconsin, don’t go with a financial planner who works out of Oklahoma. That won’t get you very far.

Kitty 20:47

So I actually found my financial planner through Yelp. She had been affiliated with an established firm, who mostly catered to well-established, upper middle class and above people, the people who do have several stacks, as Meg says. But she apprenticed there and went off to do her own thing, and she really was passionate about helping young people, less established people, and she kept her rates very low because that was the type of client that made her happy to work for. So those people exist.

If you call a financial planner or a financial advisory firm and they give you the feeling of looking down on you because you’re not a millionaire, fuck those people, don’t give them your business—

Piggy 21:35

And leave them a terrible Yelp review.

Kitty 21:37

Yeah! I know that in general, probably a lot of financial planners would rather have a wealthy client, right?

Piggy 21:48

Yeah, especially if they’re making money on percentages. They want somebody who can afford their services and I get that, as a professional. But I would rather work with a financial planner who is like the one that you worked with, who is excited to help people get to wealth, not double their wealth once they’re already there.

Kitty 22:09

Agreed. And actually I’m genuinely not trying to be self-promotional here, but you and I had several long discussions about exactly the same quandary that we’ve talked about with choosing a financial planner. Most people who write about personal finance, they support their writing by taking money from financial institutions who want them to talk about their financial products and services very favorably.

Piggy 22:36

We don’t do that.

Kitty 22:37

We are not here to sell things that we ourselves would never buy. That is not who we are.

Piggy 22:44

Exactly.

Kitty 22:45

You need to find people who are vibing on that vibe.

Piggy 22:49

Yes.

Kitty 22:50

Don’t trust anyone who makes you feel small because you’re not rich already. Jesus fucking Christ.

Piggy 22:54

Yeah, you’re not small. You’re a fucking giant and don’t let anybody tell you otherwise.

Kitty 22:59

Amen.

Piggy 23:00

Whew, I got fired up about that! Are you good with that?

Kitty 23:02

You did, I like it. Yeah, I’m good with that!

Piggy 23:04

Listeners, if you want us to answer your question, go to BitchesGetRiches.com and click “Ask the Bitches.” This podcast is listener-supported. We are committed to never ever putting our best content behind a paywall. So if you like what we do and you want us to keep doing it, you can support the podcast by joining our Patreon at patreon.com/bitchesgetriches. And if you need even more Bitches in your life, you can read our articles or follow us on social media at BitchesGetRiches.com.

Kitty 23:32

Piggy, is there anything else the listeners should know?

Piggy 23:35

Yes, I am drinking a beer in a koozie that says “we came for the I do’s and stayed for the free booze,” which I stole from my friend’s wedding.

Kitty 23:47

Good to know.

Piggy & Kitty 23:48

Bitches out!

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8 thoughts to “Season 3, Episode 3: “I Want To Hire a Financial Advisor. Can They Be Trusted, or Are They Full of Shit?””

  1. “I wonder if this is more an example of a woman…expressing to you her general feeling of imposter syndrome.”

    100% this was my first thought too. Obviously I wasn’t there, I can’t interpret the vibe, but I know I have absolutely done this–minimized my own work/effort/knowledge when explaining my work to others. I’m working on not doing that any longer, but it’s a really hard, ingrained behavior for many women.

  2. Another great place to look for a CFP is the online search tool at http://www.letsmakeaplan.org. My husband and I interviewed a couple CFPs earlier this year because we are now part of the “oh shit we have money now, what do?!?”. We knew we weren’t doing anything *wrong* (we budget! we have goals! we use our retirement matching plans at work!) but as people that grew up in working class homes we didn’t know any of the secret WASPY rich dude ways to optimize that plan.

    We found a CFP that was a great match for us and paid for a one-time comprehensive financial plan (which we actually got reimbursed through my husband’s work benefits through his “learning account”). We met with our CFP for 6 hours/3 sessions over the course of a couple months and we were able to make some small tweaks that will help make our goals easier to achieve. We plan on going back every year or so for a quick pulse check to make sure we don’t need to adjust things further but it was really cool to see the differences that some of these small changes can make by the time we get to retirement.

  3. specifically for young professionals, especially in the healthcare field, is that they may want to look for a financial advisor who has experience with other healthcare professionals. even if you do not hand over your money to them to manage or talk about investments/debt reduction/etc, they can also offer advice about life insurance or, more importantly, occupation-specific disability insurance (bc, let’s be honest, nursing can be backbreaking work) to protect your income. (and shop around to help you find a good policy)

    1. I’ll make sure Meg sees this comment! You’re right–healthcare professionals have so many unique concerns that a financial advisor should be aware of.

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