What Good Financial Advice Looks Like

And why I believe the financial industry should be held to a higher standard.

Every month, a few thousand people come to me to find “the right” financial advisor. My mission, and the mission of Wealthramp, is to connect them with not just a good advisor, but an outstanding one who truly fits their specific circumstances.

What I’ve come to realize is that most people have never gotten truly exceptional financial advice, let alone worked with an outstanding advisor. That’s why they often tell me, “I don’t know exactly what I want, but I know I want something better than what I have now.”

Why is finding great advice so messy? Let me assure you, it’s not you. It’s them. And by “them,” I mean the financial services industry.

This is a system largely designed as a sales business model, not an advice model. Still, truly excellent financial advice and exceptional financial advisors do exist. They’re just not in every strip mall down the street.

Many people have worked with the same advisor for years. Others have relied on the rep who works for their 401(k) plan, a broker, an insurance agent calling himself an advisor, a friend, or a family member for financial guidance. And many have just taken on all the financial planning and investment decisions themselves.

When I ask how the relationship with their advisor is going, the answers are quite revealing. The most common answer I get is: “Yeah, she’s okay…I think?” Or “We don’t really hear from him that much.”

Or if I ask what their advisor is actually doing to earn his fee, I get this: “He manages our investments but that’s about it.”

Just this week, someone told me, “The only time we really hear from him anymore is when he wants to sell us something.”

That’s the reality that’s been at the heart of my work for years. I admit it: I have a massively ambitious goal. I want to raise the bar and upgrade the quality of financial advice Americans are getting.

I’m doing this in two ways. First, I encourage people to raise their expectations. Exceptional advice exists. I want people to recognize good financial advice when they see it and understand that they don’t have to settle for an advisor who simply manages investments or checks-in once a year. It’s not about expecting your advisor to outperform the S&P stock index. It’s about your whole financial life. The planning that aligns with your investment strategy.

Second, I believe the industry itself must be held to a higher standard.

One of my biggest frustrations is that so many people operating under the title “financial advisor” are still working within a sales model, yet calling themselves “advisors.” They’re paid to recommend their products and services even if those recommendations aren’t the least expensive or in your best interest, yet consumers are often led to believe they’re receiving objective professional advice.

This is exactly why I keep getting asked: “Pam, how is anyone supposed to find a highly qualified fiduciary advisor – how can this be so messy?”

That’s why I’m pointing out the warning signs people should pay attention to. Not because I enjoy criticizing this industry, but because people deserve to know they have choices.

People deserve to know that financial services is an industry. Not a profession. There is no ‘high bar’ that advisors need to pass.

So who amongst all these advisors do act as professionals even when no one requires it? After more than 30 years covering this profession, providing advice, evaluating advisors, and building a network of more than 230 fee-only fiduciary advisors, my answer is always the same:

Not many.

There are roughly 300,000 to 330,000 people operating under some version of the title “financial advisor” in the US today. In my opinion, the number who are truly exceptional is fewer than 7,000.

That’s still a significant number of professionals, but it’s a very small community relative to the size of the industry.

What separates them?

Professionalism and running a fiduciary practice are the starting points.

These few advisors are the only ones who choose to operate as professionals in an industry that often doesn’t require it. Unlike doctors or lawyers, there is no universal professional standard. In many cases, someone can pass an exam, sell insurance or annuities, and legally call themselves a financial advisor.

The exceptional advisors choose a higher standard. They are students of their craft. They continue learning. They understand investments, but they also understand taxes, retirement income, estate planning, insurance, and the complex decisions families face throughout their lives.

I just had a conversation with a fee-only fiduciary advisor in my network, Jason Lilly, CFA about this. (A video of our chat will be out soon!) He explained that much of his work isn’t really about investments. It’s helping people make better decisions all the time.

That simple statement captures what I’ve observed among the best advisors I’ve met over the years. They listen before they recommend. They ask thoughtful questions. They connect dots. They identify blind spots. Most importantly, they create clarity.

You walk away with a much better understanding of your choices, your opportunities, and the decisions in front of you.

That’s what good financial advice looks like.

The best advisors help people make better decisions about their lives. They help clients avoid big expensive mistakes, think through important tradeoffs, and move forward with greater confidence.

Once you’ve experienced advice at that level, your expectations change forever.

Reach out to me anytime with questions. And if you’d like to explore Wealthramp’s network of vetted, fee-only, fiduciary advisors, you can do so here.