4 Lies That Your Financial Advisor Will Tell You

If you are thinking about hiring a financial advisor — paying someone to manage your money for you — then you should be aware of the lies they might tell you.

I personally don’t use one and I believe in most cases, you shouldn’t either. Here’s four lies many so-called advisor will tell you. 

‘The time to act is now’

Some advisors will tell you that the time to put your money into the market is right now. They will tell you this regardless of what is going on in the market. It doesn’t matter to them if it’s a bull or bear market, all they care about is having your money in the market. 

They say this because many brokers only get paid when they put your money into the market or they buy companies for a specific commission.

This means they will almost always be willing and eager to put your hard-earned money in without hesitation, so they can see their compensation rise.

Naturally, financial advisors are trained in something called the “efficient market” theory.

This means that the value of all companies match their price at all times. Another way to look at it is that companies never “go on sale.”

This means that anytime is a good time to invest, but this is not the case. Stocks sometimes are mispriced and represent a bargain if purchased below their real value. 

‘You can’t beat the market’

This may very well be the first thing they tell you in order to scare you into giving them your money. They will tell you that you can’t beat the market because you aren’t a “professional” or “expert” like them. 

Because of this, they will diversify your money into mutual funds and continue to diversify as many times as they can.

Yet they do this mostly because many brokers get paid every time they buy investments for you, which means they would want to do this as often as possible. 

‘They can beat the market’

Even though they told you that you can’t beat the market, they can. Though might be true, but this is not actually their goal with your money.

What they care about is getting more clients because more clients means more money under management for them. If they make 1% off of capital invested they want to be managing as much money as possible, which is understandable. 

What this means for you is, they don’t care how much of a return you are getting because they are playing the numbers game for themselves.

‘Asset allocation is king’

They want you to believe that allocating your assets across as many companies as possible is the best way for you to reach your goals.

They aren’t actually looking at individual companies they think are good investments for you. Rather, they are just dumping your money into mutual funds and letting your money pull in often modest gains, at best. 

The only way asset allocation would really work would be for someone with large amounts of money to invest. We are talking millions of dollars.

For most people, this isn’t the case, and thus it will leave you seeing minimal gains over the long-term.

Recommended Articles

The One Thing That Could Tank Stocks

It has been quite an impressive market turnaround since the depth of the downturn back in March 2020, but the one big risk facing investors that they may not be

6 Exotic Vacation Spots Where a Dollar Goes Farthest

The average cost for an American to go on vacation is just about $1,200. Depending on where you go, that cost might barely cover the airfare. That’s the thing about

4 Safe Ways to Earn Steady Retirement Income

Retirement should be a time to relax and experience the good things of life that you probably missed when you were working full-time. However, to have a truly good time

Restless Leg Syndrome — Is It All in Your Head?

If you’ve ever felt tingling, crawling or tugging sensations in your legs, seemingly for no reason at all, you might have thought you were going crazy. These feelings may keep

11 Money-Burning Impulse Buys You Must Resist

The average American spends over $5,400 every year on unnecessary impulse buys. Think about what you could do with an extra $5,400. Setting aside that amount in a retirement plan

5 Questions to Ask Before You Take Money from a 401(k)

Sometimes even the most financially prudent individuals may go through an unforeseen emergency that forces them to consider making an early retirement withdrawal. However, while in your moment of difficulty

10 Ways to Spend and Live Well With No Cash

Living a healthy lifestyle isn’t always easy, and it can weigh heavily on the wallet. Organic food can cost a pretty penny and holistic healthcare models are often paid out

Save Hundreds by Being Your Own Pest Control Service

The average cost of a pest control visit can be anywhere between $150 to about $1,500, depending on the severity of the problem. Most new homeowners don’t appreciate that when

How to Protect Your 401(k) in the Event of a Market Crash

It's normal for investors, especially those close to retirement age, to worry about fluctuations in the market and how it will affect their 401(k) plans. And while there's no way

Would You Eat Ugly Carrots to Save Money?

“Ugly produce” a is term for aesthetically unpleasing food that usually goes unsold in lieu of more cosmetically appetizing fruits and vegetables. Bruised, blemished, or misshapen apples, double-headed carrots, or

credit score boost

Credit Score Boost: How Your Behavior Affects Your Credit

A credit score is a lot like your personal economic statement. Getting a credit score boost improves your money life immediately. Any time you apply for a loan, a mortgage,

Retiring? Here’s 4 Cities Where You Can Live on $1,500 Monthly

Retirement should technically be a wondrous time of life where you stop living to work and start working on living. However, retirement in real life is nothing like the pop-culture