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SmartAsset: Can You Have More Than One Financial Advisor?

Financial advisors help people create a comprehensive plan for managing their money and reaching their goals. Different advisors can offer different services, depending on the type of clients they typically work with. Can you have more than one financial advisor? The short answer is yes, you can. Whether it makes sense to have multiple advisors can depend on your goals, needs and budget.

Need help finding a qualified financial advisor? SmartAsset’s free tool matches you with up to three financial advisors who serve your area.

What Does a Financial Advisor Do?

Financial advisors get paid to offer professional financial advice to their clients. Advisors help people to create personalized plans for managing their money in order to reach their individual financial goals. The term “financial advisor” can refer to a number of financial professionals, including:

  • Investment advisors
  • Financial planners
  • Investment or financial consultants
  • Wealth planners
  • Registered representatives

A financial advisor may hold certain professional certifications or credentials signaling their expertise in a particular area. A Certified Wealth Strategist (CWS) designation, for instance, means the advisor has specialized knowledge in wealth planning.

Financial advisors can meet with clients in person or online to discuss their needs and goals. Robo-advisors offer a new take on the traditional advisory model. Instead of getting financial advice from a person, you’re getting advice that’s based on a specific algorithm when you use a robo-advisor.

A fiduciary financial advisor is obligated to follow a fiduciary standard when offering financial advice. What that means, in simple terms, is that they’re required to act in their client’s best interests at all times. All investment advisors are fiduciaries, though not all financial advisors adhere to a fiduciary standard.

Can You Have More Than One Financial Advisor?

Yes, you can have more than one financial advisor. There are no rules saying that you can’t work with multiple advisors. For example, you might use a financial advisor for general financial planning and an investment advisor specifically for managing your investment portfolio. Or you might have a traditional advisor while also using robo-advisory services.

Having more than one financial advisor has both pros and cons. Here are some of the advantages of working with multiple financial advisors:

  • You can get different viewpoints and perspectives on how to achieve your financial goals.
  • Individual advisors can focus on different aspects of your financial plan, allowing you to get the benefit of specialized advice.
  • Using a robo-advisor alongside a traditional advisor may allow you to save money on advisory fees since robo-advisor platforms are typically less expensive.
  • Different advisors may be able to offer access to a broader range of financial products to choose from.

There are, however, some potential downsides to keep in mind. For one thing, having multiple sets of eyes on your finances can lead to conflicts if your advisors have different takes on how to help you best reach your goals. You might not be sure which advisor’s advice to follow or applying both advisors’ strategies could prove to be counterproductive.

Working with more than one advisor can also mean paying more in advisory fees. Higher fees can detract from your overall returns, meaning your money has to work that much harder to make up the gap. Not only that, but you may be potentially compromising your returns if your portfolio underperforms because you’re receiving conflicting advice.

Having multiple cooks in the kitchen, so to speak, could also be problematic if your advisors take different approaches to tax management. A single advisor may be better positioned to review your entire financial picture and come up with strategies for minimizing your tax liability.

Should You Have More Than One Financial Advisor?

SmartAsset: Can You Have More Than One Financial Advisor?

Whether you should consider working with more than one advisor can depend on your overall goals and financial situation. If you’re fairly new to investing and you haven’t built up a sizable net worth yet, for instance then one advisor may be sufficient to meet your needs. On the other hand, if you have a larger or more complicated estate, then it could make sense to have different advisors to handle individual areas of your financial plan.

For example, you might have a general financial advisor who offers advice on your overall financial plan. An investment advisor may handle your portfolio and specific investments while you rely on your wealth manager to help with things like tax management and estate planning. In that scenario, you could benefit from getting targeted versus general advice.

You may also decide to have multiple advisors if you don’t feel comfortable typing up all of your assets with a single firm. When weighing the decision to hire more than one financial advisor, consider your goals and what you expect an advisor to do for you. Also, think carefully about the costs and what you’ll pay to each advisor in exchange for their services.

How to Find a Financial Advisor

Choosing the right financial advisor or advisors to work with matters because you want to find someone who fits your needs and charges reasonable fees. You can start your search for a financial advisor online and ask friends or family for referrals.

Here are some key questions to ask when choosing a financial advisor:

  • What services do you offer?
  • Which credentials or certifications do you hold?
  • Do you have a specific type of client that you work with?
  • What is your investment or financial management style?
  • Are you a fiduciary?
  • How much do you charge and how do you structure your fees?
  • How often will we communicate and what’s your preferred method of communication?

It’s also important to research an advisor’s background to check for any disciplinary or ethical issues they might have on their record. You can use FINRA’s BrokerCheck tool to look up an advisor’s professional history.

If you’re considering a robo-advisor, take a look at how the platform works and the services offered. For instance, some robo-advisors include automatic rebalance and tax-loss harvesting but not all of them do. Other robo-advisor platforms may allow you to connect with a human advisor occasionally if you need more detailed advice.

As with human advisors, you’ll also want to review the fees you’ll pay. Robo-advisors typically charge a flat percentage fee but there might be different fee tiers applied if there are multiple plans to choose from. For instance, you might pay one fee up to the first $100,000 in assets, then a different fee once your account balance passes that threshold.

Bottom Line

SmartAsset: Can You Have More Than One Financial Advisor?

Can you have more than one financial advisor? Absolutely. But again, having multiple advisors can be more appropriate in some situations than others. Assessing where you are financially right now and where you hope to go can help you to decide if using more than one advisor is a wise decision.

Financial Planning Tips

  • If you don’t have a financial advisor yet, finding one doesn’t have to be complicated. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
  • It’s a good idea to do your own research any time your financial advisor recommends a specific financial product or investment. For example, they may suggest an annuity to help you create a supplemental stream of income in retirement. Annuities can be complex and often expensive, so it’s important to understand how they work before investing your money in one. When vetting investments, consider things like the risk/reward profile, the performance history, potential tax liability and the cost of owning it.

Photo credit: ©iStock.com/Drazen Zigic, ©iStock.com/Morsa Images, ©iStock.com/grandriver

Rebecca Lake Rebecca Lake is a retirement, investing and estate planning expert who has been writing about personal finance for a decade. Her expertise in the finance niche also extends to home buying, credit cards, banking and small business. She's worked directly with several major financial and insurance brands, including Citibank, Discover and AIG and her writing has appeared online at U.S. News and World Report, CreditCards.com and Investopedia. Rebecca is a graduate of the University of South Carolina and she also attended Charleston Southern University as a graduate student. Originally from central Virginia, she now lives on the North Carolina coast along with her two children.
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