How a Financial Advisor Can Help with Tax Planning

Let’s face it. We hate spending money on things we think we can do ourselves. Maybe you feel that way about investing. Why should you pay a financial advisor when you could manage your money yourself?

There is a lot of secondhand information floating around about financial advisors. People tend to cringe at the fees, or they think they’ll be cutting a check at the first meeting. So, when it comes to investing, some people say, “I can handle it all on my own.” But let me ask you this: Do you fix your own air conditioner? Build your own computer? Fly your own plane? Yeah, me neither.

You use a professional because they have more education and experienceYou know they’ll do the job right. And that gives you peace of mind. The same applies with your finances. You need a pro in your corner. Here’s why.


The term “financial advisor” isn’t an official title or name of a degree. It’s a generic name for people who provide a wide variety of financial services. And those services often have specific training or education attached to them. Here are just a few:

    • Certified Public Accountant (CPA) — These folks have to pass a rigorous exam to be certified. They can help you with taxes, business services (like mergers and acquisitions), consulting and accounting, of course.
    • Personal Finance Specialist (PFS) — These people are CPAs who have passed even more exams and have gained extensive education and experience. They can help you with broader financial planning, not just accounting.
    • Registered Investment Advisor (RIA) — These advisors specialize in managing the assets of people who have a high net worth. They also work on behalf of endowment funds, commercial banks, mutual funds, hedge funds, and insurance companies to help those businesses make more money.
    • Certified Financial Planner (CFP) — These individuals also have to pass an exam to earn certification. Plus, they must have work experience and agree to a code of ethics. Their expertise includes taxes, estate planning, insurance and retirement planning.
    • Chartered Financial Analyst (CFA) — These folks must take three exams and have three years of experience in their field. They focus on stock analysis for banks, mutual funds, and other big institutions—not financial planning for individuals.

Now, financial advisors can have more than one license. For example, a Certified Public Accountant (CPA) can also be a Certified Financial Planner (CFP). I know, it gets confusing with all the abbreviations. But the gist is this: Work with someone who has training and experienceDon’t trust your uncle’s cousin or an old college “buddy” you kind of knew for help with your investments.

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