The Importance of Financial Advice


If you had bought $100 worth of BitCoin in 2011 and sold it in October of 2017, you would have made in excess of 3 million dollars on that investment. If you had bought in November of 2017, and sold in December, you likely would have lost a significant amount of money.

Few people anticipated cryptocurrency’s meteoric rise and subsequent fall, and those who did made tremendous amounts of money off their investments.

If you had bought a piece of real estate in the year 2000 and sold in 2007, you likely would have made a tidy profit. But if you had bought in 2007 and sold in 2009, you likely would have lost most of your investment.


The point is, we are not always equipped to see financial opportunities—or risks—as they develop. That is the nature of capitalism and entrepreneurship. Entrepreneurs risk a lot in the hopes of earning even more—but a good entrepreneur knows they cannot go it alone.


The successful entrepreneur is not afraid of seeking advice, or networking with thought leaders and learning about what future opportunities and risks may help or hinder their business.

Don’t go it alone, consider learning from wealth management firms so that you don’t miss the next big opportunity and you invest wisely.


What Kinds of Financial Advisers are There?

The kind of financial advice you need depends primarily on your goals.

Forbes, one of the most famous business oriented publications in the world, describes picking the right financial adviser as one of the most important decisions a business person can make.

There are, broadly, two types of financial advisers. Those that require licensing, and those that do not. Registered Investment Advisers, Money Managers, Investment Adviser Representatives, and other financial services specialists all require special licensing to do their jobs and dispense their advice. They are held to high professional and ethical standards, and there is often some form of recourse against them if they mishandle your funds.


Financial planners, as opposed to financial advisers, do not require any such licensing. Essentially, any person can call themselves a financial planner. This does not make financial planners automatically untrustworthy. There are many talented, unlicensed, financial planners who came to their positions by being successful small business people or through some other experience-based process. When considering a financial planner (as opposed to adviser) be sure to get the potential candidates background and resume before entrusting them with your money.


In either case, a good, professional, financial expert can help you grow your business and anticipate risks and challenges.


Why Can’t I Plan My Own Finances?

You can. But everyone has their limitations, and no one is an expert on everything. The problem with an investment portfolio centered around one particular investment type is: if that market, sector, or industry runs into trouble your entire portfolio could be at risk.


Diversification can provide some degree of safety from the vagaries of the market, but diversification requires insight into several often incredibly different industries. You may know a lot about real estate, and nothing about government bonds—but it’s good to have a little bit of both!


This is the utility of a financial adviser, they can help you decide what sort of investments best complement your business plans.


And ultimately, no one wants to have to face these sometimes monumental decisions alone. If you wouldn’t try to manage your physical health without a doctor, why would you try to manage your financial health without the entrepreneurial equivalent?