Not only does hiring multiple financial advisors provide multiple perspectives, allowing you to benefit from the expertise of a variety of specialists in different areas – it doesn’t have to cost you any more than hiring just one advisor. Consider assembling a team of multiple advisors to take your financial health and your progress toward your goals to the next level.

Hiring a financial advisor is one of the best ways to achieve your goals, whether they’re as pragmatic as establishing a plan to save up to buy a home, as lofty as becoming an accredited investor or as fun and frivolous (but well deserved!) as a luxurious trip to Disney World. 

What you may not have realized is that hiring more than one advisor can help you reach those goals even more quickly and achieve even greater financial health and stability – all without spending more money than you would by hiring just one advisor. 

Embracing a plurality of perspectives in your financial management team can allow you to optimize your savings, investment, and tax strategies in a way that just one advisor – no matter how smart, hard-working, and talented they are – almost certainly wouldn’t be able to do. 

Ready to hire more than one financial advisor? AdvisorCheck is the internet’s top advisor research platform, gathering all the credible information that’s out there and delivering it to you in the form of clear and readable reports that make it easy to find, assess and compare prospective hires. Begin your journey to new heights of financial empowerment by claiming your free AdvisorCheck membership.

“Don’t Put All Your Eggs in One Basket”: More Advisors = More Perspectives On Your Financial Situation

The world of finance, financial markets, tax law, and more is extremely complex and constantly evolving, which means no single advisor can possibly maintain a monopoly on all the relevant knowledge that’s out there. 

The more advisors you have, the more perspectives you have access to, and the more people there are contributing their specialized knowledge to your wealth plan. Multiple advisors can act as a safeguard against the human pitfalls of individual bias or limited expertise. 

This is where the time-tested adage “don’t put all your eggs in one basket” holds major significance as a form of risk mitigation. 

Even if you’ve managed to hire one of the best financial advisors in the world, they’re still human, so they’re always capable of making mistakes or being biased in some areas. Expanding your advisory team to more than one financial advisor gives you access to a broader range of perspectives, which protects you from the risk of being overly reliant on one fallible individual’s judgments or recommendations. 

Remember That “Steel Sharpens Steel”

Think of another old aphorism: “steel sharpens steel.” This maxim draws inspiration from metallurgy to remind the listener that the best way to hone and refine your skills is by engaging with others with a similar level of knowledge and expertise. 

In the context of managing your finances, operating on the belief that “steel sharpens steel” means having a team of experts with a diverse range of perspectives, strategies, and insights. Ideally, your financial team is a dynamic collaboration where advisors learn from each other, interrogate each other’s assumptions and beliefs, and collectively enhance their own abilities – all to provide you with the best possible financial guidance. 

After all, who is better equipped to challenge an advisor’s less-than-optimal financial advice than another skilled financial advisor? Having multiple perspectives on your side means you’re less likely to succumb to the consequences of low-quality financial advice; at least one other advisor is always present to point out red flags in other advisors’ advice. In other words, your financial advisors are the steel, and their interaction makes all of them collectively “sharper.”

Follow the Lead of the Most Successful People, Who Frequently Have Multiple Financial Advisors

While many wealthy people got where they are today through sheer luck (e.g., by inheriting lots of money), others were able to make – and keep – the money they have by making smart financial decisions.

One of these smart decisions is having multiple financial advisors, which is an increasingly popular choice among the wealthiest members of society. Managing significant wealth can require a great deal of specialized expertise, and hiring multiple advisors can help wealthy individuals and families ensure that their unique financial goals and circumstances are fully understood and addressed.

But even if you’re not a member of society’s top wealth strata, you can imitate the financial management practices of the wealthy to get closer to the top – there are major benefits to having multiple financial advisors for people at all levels of wealth. 

The most successful people know that a diversified financial management team provides a broader range of expertise and insights, mitigates financial risks by reducing reliance on a single advisor’s perspectives, and enhances the performance of all advisors on the team by encouraging debate and healthy competition. 

Different Advisors Have Different Specialties, Which Can Complement One Another as Part of Your Financial Team

There are so many different types of financial advisors with an array of different certifications, from IAR, to RR, to DRR, CFP, CPWA, CLU, and more! Depending on their training and the areas of focus where they have the most experience, different advisors can have vastly different specialties. 

Here are some examples of the many different areas of finance in which advisors can specialize:

• Investment planning
• Retirement planning
• Taxes – planning, preparation, minimizing liability, and more
• Estate planning
• Life insurance
• Budget planning and personal finance
• Wealth management for high-net-worth clients
• Mutual funds
• Divorce
• Debt management
• Specialized investments like real estate, mutual funds, hedge funds, and socially responsible investments

While many advisors are generalists who have expertise in more than one area, no advisor can be a leading expert in absolutely every aspect of finance, especially considering how complex each of these areas can be on their own. Instead of hiring one financial advisor who knows a little about a lot of different areas, why not follow the lead of the wealthiest and most successful individuals? Consider hiring several advisors, each of whom has specialized knowledge that they can apply to different areas of your finances.

As described by Mark P. Cussen, a Chartered Mutual Fund Counselor (CMFC) with expertise in investing, economics, and market news, “Having more than one financial advisor allows you to gain guidance in specialized areas that your current advisor may not have expertise in managing. For example, if your advisor specifically advises on stocks, but you need assistance taking out life insurance, you may want to consider seeking advice from a personal insurance advisor.”

Cussen adds that it’s important to communicate with all your advisors effectively to get the full benefit of all their services: “If you have several financial advisors helping manage your investments, make sure you effectively communicate with them all to ensure there is no overlap and misunderstanding in the services they are providing. Consider having a quarterly virtual meeting with all of your advisors to maximize collaboration and outline your objectives.” 

Effective communication with and among your advisors can mean the difference between your advisors working together to hone and optimize their advice, and several advisors wasting your time and money by working inefficiently or even at cross purposes.

An Example of When You Might Want to Hire Multiple Advisors

For instance, let’s say you’re going through a divorce and are also interested in transitioning your investments to a specialized area like real estate. Perhaps you’re already working with a generalist advisor who can help you set an overarching course for your financial plan, but given your current life circumstances, you might also want to hire a financial advisor who specializes in helping guide their clients through divorce, as well as another advisor who specializes in real estate investment. That way, the financial aspects of your divorce and your real estate investments are both being overseen by experts who are up-to-date on all the latest developments in their fields – and you can rest easy knowing you’re getting the best possible advice on each of those areas.

Hiring Multiple Financial Advisors Won’t Necessarily Cost You More Than Hiring One – There’s No Extra Cost to You to Split The Fees

Not only are there numerous significant benefits to hiring multiple financial advisors, as we’ve already outlined in this blog post – you might also be surprised to learn that doing so won’t necessarily cost you more than hiring a single financial advisor! So you can reap all the benefits of multiple experts’ knowledge without paying more money for these benefits.

Here’s how it works. Financial advisors’ fees are typically based on a percentage of the assets under their management (that is, how much of your wealth you’re having them manage). The fees are distributed among multiple advisors, so each advisor’s portion of fees is lower than what a single advisor would charge for managing your entire portfolio. 

Here’s an example to help you conceptualize this. Let’s say you’ve hired a total of three advisors. Advisor #1, Advisor #2, and Advisor #3 all have fees that equal about 1 percent of assets under management. Because they all have equivalent fees, you don’t end up paying extra money in total by hiring additional advisors. 

An easy way to visualize this would be to think about it like this. Let’s say you have $100,000 invested with one financial advisor. Your fee would be associated with the total amount of money invested. Above, we mentioned 1 percent, or $1,000.

Now if you had three financial advisors who managed $33,333.33 each and their fees were the same 1 percent,, your fee with each financial advisor would be $333.33, totaling $999.99. 

In most instances, there is no additional cost to having multiple advisors working for you. 

“This is great if you are looking for multiple advisors who specialize across various areas,” says Leonard Kim of AdvisorCheck. “This gives you the ability to work with someone who might specialize in ETFs, another who specializes in blue chip investments, one who specializes in finding immense tax breaks, one who can help you save significantly on real estate purchases and virtually any other financial instrument that you can think of,” Leonard continued.

It’s also worth considering that even if there is a slight increase in fees when you hire multiple advisors, the significant and tangible benefits you’ll gain through diversification, expertise from various specialties, potential for enhanced performance, and risk mitigation would far outweigh those slightly greater costs. A cost-benefit analysis shows that hiring multiple financial advisors is worth it even if they do cost slightly more, which won’t necessarily be the case.

Don’t Make the Rookie Mistake of Seeking Quantity Over Quality – Hiring Skilled, Trustworthy Financial Advisors is Still Absolutely Essential

Although assembling a team of multiple financial advisors is a great strategy to protect yourself from the kind of biased or misinformed advice that can come with “putting all your eggs in one basket,” don’t get us wrong – this is by no means a matter of quantity over quality. 

Hiring one skilled and reliable financial advisor is infinitely better than working with more than one less-than-stellar advisor. Yes, “steel sharpens steel,” but to extend this metaphor, you can’t rely on a lower-quality metal like aluminum to sharpen aluminum!

That’s why you’ll want to hire the best professionals possible when you’re assembling your team of financial advisors. Using AdvisorCheck is by far the most effective way to ensure you’re only working with the best financial advisors in the industry.

Use AdvisorCheck to Assemble a World-Class Team of the Best Financial Advisors

Whether you already have one advisor working for you and are hoping to add one or more specialized experts to your roster, or you’ve never hired a financial advisor before and are starting entirely from scratch, AdvisorCheck is the best place to begin your search. 

If you’re just beginning your search, AdvisorCheck makes it easy to find the best financial advisors near you, specializing in a variety of different areas. The site brings together all the information available on advisors from the most rigorous, definitive, and reputable sources and condenses this information into an easy-to-read yet highly detailed profile – maximizing the info you’re able to glean about a prospective advisor in just a few minutes. The database contains in-depth info on over one million investment advisor representatives (IARs) and registered representatives (RRs), as well as numerous other designations and certifications. 

Every time you look up an advisor, you’ll receive a report containing:

• The history of their experience
• Their professional credentials
• Any disclosures on their record
• Exams they have taken to receive certifications
• Other business they might have
• And more

And all this information is available to you completely free of charge, in order to further AdvisorCheck’s simple yet absolutely essential goal of enhancing transparency in hiring financial advisors to protect consumers and help them consistently receive the best possible advice.

AdvisorCheck also has a built-in comparison tool that makes it easy to compare your top choices once you’ve assembled several prospective hires, which you can use once you’ve claimed your free AdvisorCheck membership and logged into the site. 

From here, add any advisors that you’re considering hiring to your Saved Listings. You can compare and contrast up to three advisor profiles at a time by clicking on the scales symbol at the bottom of every advisor profile and then navigating to the Compare tool on the website’s left-hand sidebar.

AdvisorCheck’s Compare tool puts the most important info from the three advisor profiles of your choice next to each other to make it easy to decide which of the three would be the best fit for your needs. The basis of this comparison includes:

• Basic information: Location, years of experience, credentials, number of disclosures, and more. such as their location, number of disclosures, years of experience, credentials, etc.
• Firm information: Assets under management (AUM), average account size, number of employees, client-employee ratios, and more.
• Advisor profile: Minimum assets, areas of expertise, ways they are compensated, contact information, languages they speak, and other info that’s crucial to the decision-making process.

By making the most important info about up to three different advisors at a time incredibly easy to understand and cross-reference, the AdvisorCheck Compare tool can cut 80 percent or more off of the time you might have otherwise spent researching prospective hires.

And that’s not to mention that with AdvisorCheck’s tracking functionality, you can continue monitoring the advisors you decide to hire, so the database remains an essential tool even after you’ve made your hiring choices. All you have to do to monitor them is save your advisors’ profiles to your AdvisorCheck account, and you’ll be notified whenever new changes such as disclosures are added to their profile. 

All in all, AdvisorCheck is the most effective knowledge-gathering tool out there to ensure your team of financial advisors is filled with the brightest (and most trustworthy!) minds in the industry. Using AdvisorCheck allows you to assemble a team of top-notch advisors whose experience-based expertise aligns with your specific needs. Click here to harness the power of AdvisorCheck by creating a free membership, so you can confidently navigate a complex financial landscape, develop lasting relationships with advisors, and set yourself on a path toward achieving both your loftiest and your most immediately practical dreams and aspirations. 

Written by Billy Quirk

Fact checked by Luke Jara

Reviewed by KJ Kim

Disclosure

The information provided in this article was written by the research and analysis team at AdvisorCheck.com to help all consumers in their financial journeys, by providing the resources and the insights to help improve one’s financial health, make it through recessionary and inflationary periods of time, and save their earnings to use them towards building a secure financial future. 

Unauthorized reproduction or use of this material is strictly prohibited without prior approval. Any parties interested in content syndication, references, interviews, or PR, please contact our marketing team at marketing@aimranalytics.com

AdvisorCheck.com is an independent data and analytics company founded on the principles of helping to provide transparency, simplicity, and conflict-free information to all consumers. As an independent company providing conflict-free information, Advisorcheck.com does not participate, engage with, or receive funding from any affiliate marketing programs or services. To become a free AdvisorCheck member, visit advisorcheck.com/signup