What Your Financial Advisor Isn’t Telling You: The 10 Essential Truths You Need to Know About Your Money

by Liz Davidson

Whether you have a financial advisor or are considering finding one, this guidebook, written by an expert in the field, will help you interpret the jargon and empower you to ask tough questions to protect your money now and in the future. ¶“Accessible and practical, this guide contains valuable tools for managing one’s personal finances for maximum results.”― Publishers Weekly (starred review) ¶ It seems like a foolproof if you want to be smart about protecting and growing your wealth, you should seek guidance from a trained financial advisor. But, as CEO of the country’s largest provider of workplace financial wellness programs, author Liz Davidson has seen firsthand how that seemingly smart decision can go awry. Why? Because you can never blindly trust that your advisor has your best interests at heart. Drawing on her insider’s knowledge of how the financial advice profession really works, Davidson reveals how to judge whether an advisor is going to help or harm your savings. How should you decide if you really need an advisor? What financial moves can you make on your own? What questions should you ask before trusting an advisor with your money? What are the red flags you should run from? And what does all their jargon really mean? This friendly, no-nonsense guide is a must-read if you want to finally take control of your financial well-being, either with a financial advisor or without.

Genres: Nonfiction, Finance, Personal Finance, Money, Business, Self Help, Reference

256 pages, Hardcover

First published January 5, 2016

About the author

Liz Davidson is CEO and Founder of Financial Finesse, a Los Angeles based firm, providing millions of Americans with access to unbiased financial guidance through workplace financial wellness solutions. In 1999, she spearheaded the movement to institutionalize financial wellness programs in the workplace and has influenced legislation around requirements for financial professionals to ensure they work in the best interest of investors through the fiduciary standard.

As an advocate for investors, Liz is a pioneer of the financial wellness movement. She lays out the ways that workers can find their own financial security in her upcoming book, "What Your Financial Advisor Isn't Telling You,"​ which will be published by Houghton Mifflin Harcourt in January, 2016.

Additionally, Liz has been tracking and analyzing trends in employee financial issues for over 15 years and provides commentary to Financial Finesse's corporate clients as well as to human resources and financial media. She is considered an expert in the field of workplace financial wellness and behavioral finance and speaks regularly at national conferences on related issues. She also publishes a column on Forbes.com around employee financial issues.

Reviews

[Anna · Rating 4 out of 5]

Excellent, realistic financial information told in an engaging and easy to understand way. I have read many other good financial guidance books and this is a strong entry into that category, but it also means that there was not really anything new here as good financial advice really does not change. Always good to be reminded of the principles though, and perhaps eventually I will find the courage to follow those pieces of advice that I have been, thus far, reluctant to adopt.

[Kelley · Rating 5 out of 5]

Even as a financial planner, I learned several things that have helped take the guidance I give people to a whole new level. I love it because I can recommend this book to anyone and know that they'll find value. I'm excited to start my Financial Independence Day group!

[Kelly Lynn Thomas · Rating 5 out of 5]

I do not have anywhere near enough money to warrant a financial adviser, but this books was invaluable in learning how to better manage my money.

Davidson's advice makes so much sense. In essence, she suggests maxing out your tax-favorable employee benefits (401k, HSA/FSA, etc.) and then paying yourself (paying off high-interested debt, emergency savings, and the like) before you even THINK about going to an outside advisor with your hard earned dollars. She goes into depth about why these things make financial sense and what kind of "return" you get on them.

She also delineates what makes a good financial advisor, the various conflicts of interest financial advisors can have, and how to avoid bogus and incompetent advisors. This was interesting to me not so much because I'm looking to an outside advisor to invest with, but because it highlights what's wrong with the financial industry, and then suggests ways to change the culture.

I think this is a great read for anyone who struggles with their money or finances, or who just doesn't understand how the financial industry works.

[Maris · Rating 4 out of 5]

I picked up this book after landing my first job with a livable salary. I was intimidated. Building an emergency fund was daunting: how could I save enough? Saving for retirement was terrifying: how could I weigh all these variables and manage to make the right decision?

This book gives you information that helps you make smarter choices about your money, whether you have a lot or a little of it. I found the whole thing empowering, and I'm not exaggerating when I say I was so energized that I revamped my entire budget, set up specific savings goals, and opened a retirement account before I even finished reading. If you're paralyzed by the thought of taking a step forward, give this book a try. With ample references to organizations and agencies, numeric demonstrations, and examples of pitfalls, I felt confident Davidson was painting a holistic picture of financial wellness apart from the potential of personal gain.

I will admit that some sections may sound like a cheap shot at a sale (become an automatic millionaire!), but don't let it discourage you. The text is far more nuanced.

You might also notice some redundancies. I was patient with them, considering that the consistency of the message seemed to emphasize an important truth: you have more information and resources at your disposal than you realize, and you're likely better off using them first than seeking out a financial advisor.

Highly recommended: low payout, substantial return.

[Danielle Hubner · Rating 4 out of 5]

As a first step to conquering my personal finances and setting up a more solid foundation for my future, I decided to read Liz's book and was not disappointed! I learned a lot about what I need to know if and when I decided to get an advisor. I also learned that I am not alone with being confused and there's a lot of work to do on a national level to get Americans in a better place with their money.

[Emily · Rating 5 out of 5]

Highly recommended - easy to read, engaging, understandable nuggets of financial information to get you started down the right path. This book is incredibly insightful and helpful to understand what one should expect from a good financial advisor and what the warning signs are for someone who won't help you to generate the most wealth over your lifetime. It has some great practical tips about how to maximize your returns by avoiding excessive fees on investments (the 3% plan, etc.). A great entry into financial self-help books that is probably worth a second read just to truly absorb the entirety of the advice and plans that are laid out within.

[Elaine Messineo · Rating 5 out of 5]

Excellent information, very thorough, and simplified the information to make it very understandable.

[Leslie Yong · Rating 3 out of 5]

"What Your Financial Advisor Isn't Telling You" is a book written by Liz Davidson, a financial expert and founder of Financial Finesse.

The book aims to educate readers on how to make informed decisions about their financial lives, highlighting potential biases and conflicts of interest that may exist in the financial advisory industry.

Some key takeaways from the book include:
- Understanding advisor motivations
• Fees and commissions.
• Investment strategies
• Retirement planning

Overall, the book can be a valuable resource for anyone looking to take control of their financial lives, understand the financial advisory industry, and make informed decisions about their money.

However, the book is written with a focus on the US financial markets and practices and is tailored to the American financial landscape.
While some general principles and concepts may be applicable to other countries, the specific regulations, laws, and financial products mentioned in the book are primarily relevant to the US market.

[C.A. Gray · Rating 5 out of 5]

If you don't know anything about financial planning and you're looking to learn before trusting someone to advise you on your money, this book is excellent!

I'm in that category. I inherently don't trust the "experts" just because they're experts, but I also don't want to have to learn everything myself; at a certain point, I have to be able to delegate. This book reinforced my natural inclination, but also clarified for me what indications should be red flags, and what evidence should convince me that someone is more likely both trustworthy and competent. At the same time, I don't want to operate on trust alone; I need to know what questions to ask so that I can tell whether or not their responses make logical sense. She demystifies a lot, and helped me feel much more confident about choosing wisely.

I took so many notes on the kindle version of this book that I exceeded the amount allowed for export, so I had to type up the rest of my highlights by hand (I keep all of these in an Evernote database for future reference.)

[Linda · Rating 2 out of 5]

Basic boiler plate stuff, author and financial educator Liz Davidson peppers her book with examples from real clients (just the names changed to protect the financially insolvent) which always improves a read. She offers some radical and tells you they are strategies to save a ton and retire early. Of course, it's nice if you're making a ton. I do what I love but the money has never followed.

She is hard on financial professionals even though she admits most are honest. At least her horror stories led me to check my advisor's credentials. All good, proceed.

[Larry Zhou · Rating 5 out of 5]

good for the basics. gives unbiased opinions on financial advise. solid advice
basically:
0) take a look at how you're spending
1) pay down highest interest debts first
2) plug holes in your financial plan - where is your money going to? can you do without them? how important are they to your livelihood?
3) optimize your tax-friendly options first - aka max out everything your employer gives you
4) invest in low expense ratio options
5) when you have enough money look for a financial advisor that is unbiased and is not incentivized by their own wallet
6) financial freedom!

[Bryan · Rating 3 out of 5]

This is a good book that explains some of the conflict of interest that sadly is present in the realm of financial advisors. In addition it provides practical advice on simple things to do in both the short and long term to improve your overall financial situation. A key takeaway is that there are many things that you can do with your money before you should consider talking to a financial advisor. Not all are common knowledge, even though many are easy to implement. This is a good starter guide and is a worthwhile read.

[Christine Hunt · Rating 4 out of 5]

Although I didn’t read word for word, I found the chapters & headings to be neatly labeled so that my eye was drawn to exactly what I was looking for. I learned some good tidbits & takeaways that were easy to understand and not intimidating. I would defiantly recommend this book to anyone considering being more in control of their money. My motivation was to simply figure out if my financial advisor was the one I needed to stick with and maybe some “behind the scenes “ info that might give me more confidence. This book was two thumbs up.

[Elsa · Rating 3 out of 5]

This is fine advice as long as you can remember that the author runs a financial advising company. So in the end, she will try to convince you that you need a financial advisor. But she does give some information about what to look for and avoid in an advisor and reminds you that you are still responsible for your own money so you do need some background knowledge in order to work with your advisor.

[Peter · Rating 5 out of 5]

Excellent book about taking control of your money without needing to pay a financial adviser (or advisor).

It's a little US-centric in some areas, but the majority of the information here is very solid and widely applicable.

Definitely read this if you want to get a better handle on your finances.

[Divyesh Sheth · Rating 5 out of 5]

This is an excellent book on simple advice on how to invest. It does not focus on how to choose your investment. However, the advice on how to leverage the employer funded programs and invest in index funds with cost as a focus is right on the money. It also talks about how to find a good financial advisor if you need one, but areas you should be aware of that an advisor will not focus on.

[Sam · Rating 1 out of 5]

I didn’t like the writing of this book. It felt the author was trying to make things suspenseful but it just seemed incoherent and scattered without a clear thesis. Also, in the second chapter on debt, she talks about good debt and bad debt, but does a poor job of explaining or defining the difference. That was the final straw that caused be to quit this book

[Kim Lammers · Rating 4 out of 5]

Helpful read. I only read the chapters that I was specifically wanting to learn more about. This book could be read cover-to-cover, or you can pick what is relevant for you. Love that it is written by a woman!

[Sharon · Rating 3 out of 5]

Tips to keep you aware and on your toes of where Advisors might not been best resources for information - key takeaway: balanced approach to diet and retirement savings wins the race!

[K · Rating 4 out of 5]

This will be an excellent guide for when we decide to invest.

[Kiona Meade · Rating 5 out of 5]

Pretty quick and easy read with a lot of good information and resources listed!

[Linda · Rating 4 out of 5]

A good book that lays out the basics of financial security. Everyone needs to know this stuff.

[Juliet K · Rating 5 out of 5]

Of the 6 or so personal finance type books (highly rated) I’ve read over the last couple years, this is probably top 2. Lots of useful information whether or not you’re ready to get outside help.

[M · Rating 3 out of 5]

A bit repetitive but easy to listen to. Lots of time spent on the difference between advisors and someone paid to sell you investment options. A decent audiobook.

[Deanna Adams · Rating 3 out of 5]

A lot of the information wasn't relevant for someone living outside of the States, but there are some golden nuggets for all in this book.

[Paulette · Rating 2 out of 5]

This is very, very basic information. If your financial advisor isn’t discussing these things with you, that’s a serious problem. Didn’t present anything new. Disappointing.

[Lori · Rating 5 out of 5]

Very practical advice, especially for a new employee. How to maximize your benefits, etc. Loved it

[Mariah Akinbi · Rating 5 out of 5]

This really is the next step after Total Money Makeover and Debt-Proof Living! This is very practical and action-step focuses. This goes in depth about the types of investments you should look for, about how to get out of debt, how to get the most out of your employer + your money. Lots of practical examples from other people scattered throughout the book (~1/chapter).

Highly suggest reading this after TMM or DPL.


ROUND 2 THOUGHTS:
This book is more ideal once you’re out of debt, maxing out your retirement & HSA accounts, and looking for more advice on what to do with extra cash. It's also a great read for those looking for a financial advisor. It checks off the boxes on whether you need one or not and what to look for if you do need want. I learned about (1) the simple 3% Return advantage, (2) there are 0% fee index funds (!!!) (3) that I need to set up a will, power of attorney, medical directive & beneficiaries. 10/10 would recommend to everyone at some point in their life. As I said in my previous review, this is great once you're out of debt and looking for next steps.

[Jay French · Rating 3 out of 5]

I found this the first of what I'll call the "post-Madoff" investment guides for beginning and intermediate level investors. It's pretty basic stuff, and much about the basics of personal finance. But when Davidson gets to investments and planning, instead of playing the total "do it yourself" card or the "you need a team of professionals" saw, Davidson describes when and why you might need that advisor and how to pick a trustworthy one that won't pyramid-scheme away your wealth. A bit of that advice is that if the returns sound unreasonable, like Madoff's consistent high returns, there's a problem. I'm not sure the advice here is more than caveat emptor for investors, but it's good to have it repeated every once in a while. Experts can lie. I know, I bought tires this week.

[Samantha Zee · Rating 4 out of 5]

I got this as a Goodreads giveaway.

This is a pretty good introduction to better handling your finances, covering a broad range with just enough detail to make you feel comfortable about it and giving you more resources for you to further your knowledge if you want to.

If you already are into the personal finance scene, this book might be a bit too basic for you, but there is a nice checklist in the back about the steps you should take to get your finances in order and plenty of stories of other people and their decisions. This would be a pretty good book to give a college grad because, as the book shows, the sooner you start thinking about your retirement and savings, the better.