What Does a Financial Advisor Actually Do? (And How to Know If You Need One)
Written By Christopher Swan, CFP®, MBA
If you’ve ever wondered what you’re actually paying a financial advisor for, this post is for you.
The financial industry has done a poor job of explaining what advisors do — and an even worse job of distinguishing between the different types of professionals who call themselves “financial advisors.” Not all advisors are the same. Not all of them work in your interest. And not everyone needs one. Let me be straightforward about all of it.
The Difference Between a Broker, an Advisor, and a Fiduciary
These terms get used interchangeably, but they mean very different things.
A broker works for a brokerage firm. They’re paid to sell financial products — mutual funds, annuities, insurance policies. Their obligation is to recommend products that are “suitable” for you, but that’s a low bar. Suitable doesn’t mean best. It means not inappropriate.
A financial advisor is a broader term that can mean almost anything. Some advisors are brokers in disguise. Others are fee-only planners who don’t sell products at all. The title alone doesn’t tell you much.
A fiduciary is the standard that matters. A fiduciary is legally required to act in your best interest — not their firm’s interest, not their commission’s interest, yours. If someone managing your money isn’t a fiduciary, you should ask why.
The distinction between these three categories matters more than any investment return ever will. Who sits on your side of the table determines everything.
What a Real Financial Plan Looks Like (Not a Sales Pitch)
A real financial plan isn’t a product recommendation. It’s a comprehensive analysis of where you are, where you want to go, and the decisions that connect the two.
It covers income planning — how you’ll replace your paycheck in retirement. It covers tax strategy — not just this year, but over your lifetime. It addresses Social Security timing, withdrawal sequencing, Medicare planning, risk management, estate considerations, and the behavioral side of money decisions.
A good plan gives you clarity. It answers questions like: Can I afford to retire at 62? What happens if the market drops 30% in my first year? Should I convert to Roth? When should I take Social Security? How much can I spend without running out?
If your “financial plan” is a pie chart showing your portfolio allocation, that’s not a plan. That’s a sales pitch dressed up as advice.
Three Signs You’re Ready for Professional Help
Not everyone needs an advisor. But there are moments when having one becomes genuinely valuable.
First, if you’re within five years of retirement and don’t have a written income plan, the complexity of the decisions ahead of you — Social Security, tax strategy, withdrawal order, healthcare — justifies professional guidance. The cost of getting these wrong far exceeds the cost of getting help.
Second, if you’ve experienced a major life transition — inheritance, divorce, death of a spouse, sale of a business — the financial decisions surrounding these events are high-stakes and often irreversible. A clear-headed second opinion matters.
Third, if you’re spending more time worrying about money than enjoying your life, that’s a sign. Peace of mind has real value, and sometimes the best thing an advisor provides isn’t a higher return — it’s the confidence that you’re going to be okay.
Three Signs You Might Not Need an Advisor Yet
Fairness requires honesty in both directions.
If you’re early in your career, your finances are relatively simple, and you’re primarily focused on saving and investing in low-cost index funds, you probably don’t need to pay for advice yet. Keep it simple. Save aggressively. Learn the basics.
If you’re already knowledgeable about personal finance and enjoy managing your own money, an advisor might not add enough value to justify the cost — as long as you’re being honest with yourself about your blind spots.
And if someone is pressuring you to hire them, that’s a red flag, not a sign you need help. Good advisors don’t chase clients. They earn trust.
How I Work With Clients at Retire With Swan
I work as a fiduciary. I don’t sell products. I don’t earn commissions. I get paid for planning and advice — period.
My practice focuses on retirees and pre-retirees in the DFW area who want clarity around their retirement income, tax strategy, and financial decisions. I call the role a “Retirement CFO” because that’s what it is — someone who organizes your financial life so you can make confident decisions.
Every engagement starts with a conversation. No pressure. No pitch. Just a straightforward discussion about where you are and whether I can help. If I’m not the right fit, I’ll tell you that too.
Christopher Swan, CFP®, MBA is the founder of Retire With Swan, a fee-only financial planning practice in Northlake, TX (DFW) serving retirees and pre-retirees with clarity-first retirement planning. Curious if we’re a fit? Book a complimentary Swan Fit Call at retirewithswan.com.
