Do I Need a Financial Advisor?
- Jul 6
- 9 min read
Nobody teaches us about personal finance during medical school, and honestly, we don’t really have any money to manage then, so we put off learning about personal finance for a long time. However, as student loan pressure mounts, attending salaries start rolling in, and questions about how to pay for college or prepare for retirement start rolling in, many physicians in our online communities for doctors find themselves overwhelmed and start looking for a financial advisor. Ultimately, the answer to the question, ‘Do I need a financial advisor?’ is a very personal one that depends on your comfort level with finances and what brings you peace of mind, but we’ll cover a framework for evaluating whether you should consider more formal financial planning services versus a DIY approach.
Disclosure/Disclaimer: Our content is for generalized educational purposes. While we try to ensure it is accurate and updated, we cannot guarantee it. We are not formal financial, legal, or tax professionals and do not provide individualized advice specific to your situation. You should consult these as appropriate and/or do your own due diligence before making decisions based on this page. To learn more, visit our disclaimers and disclosures.
Do I need a financial advisor?
The answer to this question isn’t based on how much money you have, although many physicians assume that it is. The questions are if you could benefit from an objective partner to review your finances and help you build a financial plan, and whether you are comfortable handling the complexity of your financial situation.
While we are strong believers that (at least basic) personal finance isn’t as hard as medical school, and that every doctor could take a DIY approach to their finances, that doesn’t mean that it’s for everyone. Below, we’ll cover the questions you should be asking yourself.
If at any point you decide you need a financial advisor, we have compiled a list of financial advisors used and recommended by physicians in our communities.
Are you a DIY personal finance person, or do you want somebody else (a financial advisor) to help you?
Do I have any interest in personal finance?
You’ll hear it time and time again from the DIYers on our communities. “Personal finance isn’t that hard” “You can learn most of what you need to know in a weekend.”
While you may be fully capable of learning basic personal finance, it doesn’t mean that you will. Be honest with yourself about whether you’ll take the time to learn the fundamentals.
Test: We really believe that this personal finance primer for physicians has the vast majority of baseline personal finance that all doctors need to know to manage their finances for many years. If you can’t read through it or the thought of having to do it makes you want to do anything but read it, you may be somebody that would benefit from involving a financial advisor.
Do you trust yourself to make decisions yourself, or would you rather have somebody to bounce ideas off of and also suggest things to you?
Some people just want to hear other people echo or challenge their assumptions. That’s totally reasonable.
Are you going to take action by yourself, or do you need somebody to hold your hand through it and hold you accountable?
While personal finance 101 is truly not that complicated, if you’re going to sit in analysis paralysis or put off learning for years, the consequences of not investing for those years will far outweigh the costs you paid to a financial advisor. Just hire the advisor and get started building your wealth.
Do you trust yourself to stay calm when things are going badly?
A good advisor has the benefit of the 30,000 view, and hopefully the experience to help you navigate negative financial performance, and avoid costly mistakes like panic selling during market downturns. They will keep you on a long term plan. If you don’t think you can react rationally when you’re looking at your accounts going down on a particularly bad market day, you may need help having somebody help you stay the course.
Are your finances complicated?
Things that most physicians could comfortably manage themselves
For most physicians, the steps in basic personal finance are very straightforward. We are big believers that most physicians can DIY the vast majority of their finances if they have the motivation to learn the basics. The fact is that most early career physicians have very straightforward finances and planning.
Read this guide to personal finance for early career physicians. You’ll see that you can probably do most of this yourself as the steps are very basic for most people until they start accumulating significant wealth.
You could probably do this yourself if you wanted to if this is your situation:
You have a stable W2 job with a steady income.
You have established an emergency fund.
You are already contributing and maxing out the retirement accounts available to you.
You take a KISS (keep it simple, stupid) approach to investing in the stock market with a simple three fund portfolio type model.
You don't own a business or have sizeable 1099 income that requires complex calculations, S-corp, tax planning, or significant projections or planning for a sale
Your taxes are straightforward for you.
You're comfortable learning the basics and reviewing your finances a few times a year to make adjustments as needed.
The following concepts are easy for you:
Saving 20% of what you earn
Protecting yourself from financial ruin through insurance (life insurance, disability insurance, umbrella insurance, malpractice insurance, home insurance etc.)
Index fund investing and basic asset allocation
Creating a budget
Maxing retirement contributions and contributions to other tax advantaged venues (examples: HSA, Roth or backdoor Roth, 529s)
Managing your student loans
Related PSG resources:
How much of my salary do I need to save based on stage of life and earnings?
Insurance agents for physicians (Pro tip: you should be using independent agents, not a financial advisor, to buy these - financial advisors should not be incentivized to sell you insurance products, as it clouds objectivity in recommendations)
Are you in the midst of big financial or life transitions?
If you’re in a set it and forget it stage of life, you may not need to assess finances regularly. However, there are certain time periods where you need to pay more attention, and may want some objective opinions or complicated modeling. These could include:
Getting married and combining finances
Having children
Switching jobs
Receiving a sizeable inheritance
Selling your medical practice or a business
Considering early retirement
Losing a spouse
Getting a divorce
Are you strategizing retirement and need complicated retirement planning?
This is a stage where a lot of physicians may benefit from financial planning. It’s a lot easier to plan on your finances when there’s a steady paycheck that you spend from, and then just shift the rest into savings. In retirement, you’ll need to be much more strategic, including thinking about things like:
Which accounts you’re taking money from and in what order based on tax strategy and what’s available to you without penalty
When to start claiming Social Security benefits
When to start taking retirement and pension distributions
How much you can safely spend every year, accounting for inflation
How to plan for large expenses
In all of these cases, it may be better to model out various situations with the benefit of a more calculated system. A financial advisor can be immensely helpful with this.
Are you an extremely high income earner?
The higher your income, the more complicated your finances, usually. Unfortunately, more money, more problems holds true in this realm. As your income builds, things like tax strategy, estate planning, charitable giving, deferred compensation, and more come into play.
Calculated strategy in these spaces can easily save you far more money than the fees related to a financial planner in these situations, and chances are, you aren’t well versed enough in these niche areas not to miss things if you try and DIY them.
Do you own a business?
Similarly, business owners have a lot more strategic decisions and modeling to do to make the most of their income, and plan for unexpected things in the future. You may need to think through:
Options for self-employed income retirement plans
How you structure your business entity strategically
How you account for fluctuations in cash flow
How you think about the future of your company, a potential exit, etc.
How you compensate yourself
Stock compensation
High net worth
The higher your net worth gets, the more you may want to think about:
Estate planning
Tax loss harvesting
Asset allocation
Income diversification
Tax advantaged investments
Charitable giving
Planning around capital gains
Other tax strategy
Complicated estate planning needs
If you have a large family, potential inheritances, disabilities, mixed families due to multiple marriages, multiple trusts, etc., you may want to have more structured conversations about:
How to best leave wealth for children
How to support charities you care about
Managing family trusts
Family offices
Providing for special needs or disabilities
Can I just use AI for my financial planning needs?
Make no mistake, AI is getting better and better. It can definitely help you learn, run projections, and more. Things you should consider incorporating AI in, regardless of whether or not you use a financial planner, include:
Helping you to understand financial concepts
Comparing retirement account options to see what’s best for you
Helping to build savings plans
Explaining taxes to you and asking for ideas that you can discuss with your financial advisor or accountant
Analyzing budgets and providing feedback
Modeling "what if" scenarios
Reviewing investment allocations
Preparing questions before you meet with your financial advisor based on concerns you currently have top of mind
That said, AI models are still imperfect (as are humans, admittedly). They do suffer from hallucinations, and they don’t know you, your family, your priorities, or what to ask you. They respond based on what you give them. They also can’t give personalized legal or financial advice, and they don’t serve in a fiduciary capacity. A (good) financial advisor has a fiduciary responsibility to give you sound financial advice.
Financial advisors can also help actually implement plans, and be accountable for managing your portfolio, can have access to specialized institutional investment product, and have access to additional resources that can help you dig deeper on more complex needs.
Bottom line, AI can help you immensely in the personal finance realm, but it isn't a substitute for you learning yourself or leaning on licensed professional advice.
Where can a financial advisor provide true value, even if I know how to DIY?
There’s so many areas where an objective and knowledgeable third party may be helpful as you navigate your financial journey. These include:
Preventing you from panic selling during a market downturn
Keeping you on a long-term plan with the 30,000 foot view in mind
Coordinating with other licensed financial professionals, such as your CPA and attorney
Helping avoid costly tax mistakes or bad financial decisions
Helping navigate complex decisions by serving as a sounding board during major life decisions like how much house you can afford, planning for college or retirement, etc.
Providing retirement income strategies
Catching planning gaps that you may not have identified
Do you need continuing financial advice or is it better to pay for it on an ‘as needed basis?’
The other thing to keep in mind is that if you don’t need continuous monitoring, you could always pay for occasional one off check ins. Not all financial advisors offer this, but you may be able to find some that do. Additionally, you may feel comfortable with the basics, but want to hire very niche financial advisors for specific scenarios such as estate planning, tax strategy, or student loan management. A general financial advisor may not be the best person to discuss all of these with. As always, there are options.
Conclusion
The decision to have a financial advisor or not depends on how much help you think you need with the things above. There’s no right or wrong answer here. It’s also not black or white. You can pay for one time financial advice. Decide what you’re comfortable with, what you’re not comfortable with, and what gives you the most peace at night that your finances are working for you in the background while you sleep. Don’t get stuck in analysis paralysis, as this will cost you far more in the long run in terms of growth of your portfolio than just using a financial advisor. Remember that the amount of time you’re invested in the market is the biggest predictor of your portfolio’s growth potential.
Additional personal finance related resources for physicians
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