What matters more to a secure retirement: a financial advisor or financial literacy?

Author: Eric Brotman

Source: Forbes

In a perfect world, everyone would have an in-depth understanding of their finances, and a financial professional in their corner helping them through the big decisions.

Of course, the world is not perfect. We can’t all afford quality financial help, and we don’t all have access to good financial literacy resources or the time to better our understanding of personal finance topics.

If you had to choose one, which is more important: financial literacy or a good advisor? Let’s explore the options.

Financial literacy education

Personal finance is a topic that may not interest everyone but can benefit all who take the time to learn about it.

Understanding your finances is the only way to make educated decisions and is the key to financial wellness. Financial literacy resources can come in all shapes and sizes—from free articles and podcast episodes to reasonably priced books to expensive courses and certificate programs. There are resources for every budget and whether its free or pricey, taking time to learn more about your own financial situation will make a huge difference in your life.

A good financial advisor

Having a financial advisor whom you can trust means having a copilot for your financial journey. No matter how much you educate yourself, you’ll still have blind spots. We all do. That’s why even as a financial advisor I have a financial advisor of my own.

People tend to act emotionally, so having a third party to provide rational, dispassionate advice can help protect your financial future from your own knee-jerk reactions.

Is an advisor enough?

If you must choose between an advisor and education, an advisor may be more important.

If you can find an advisor that both acts as a fiduciary—meaning they act completely in your best interest—and takes the time to explain your financial plan and why they make each decision, you’ll be gaining an education throughout your financial planning process.

While you don’t need to be an expert, put in the effort to work with your advisor to understand your finances enough to be able to articulate them to someone else.

The lesson:

Having financial literacy and a good advisor is the best way to put yourself on track for a healthy retirement. But if you can only have one, an advisor is more important—if and only if that advisor is serving all the financial needs you have. A good advisor can help you become financially literate.


This article was written by Eric Brotman from Forbes and was legally licensed through the Industry Dive Content Marketplace. Please direct all licensing questions to legal@industrydive.com.