6 Mistakes Your Financial Advisor is Making

Ever wonder if your financial advisor is missing something important? Most people assume their financial adviser has everything under control. Sometimes, that’s true. But even the most well-meaning advisers can overlook important details. Not because they’re bad at their job, but because philosophies and best practices change. Not every adviser adapts to them.

These blind spots can snowball into setbacks like higher taxes in retirement, unnecessary risk, or missed opportunities you didn’t even know existed. Here’s a look at the most common mistakes financial advisors make and how to spot them before they derail your financial future. 

Mistake #1: No Financial Plan Reviews

Financial plans need regular reviews. One of the most common mistakes in financial planning is setting your plan once and letting it gather dust. In fact, 47% of Americans don’t have a written financial plan at all, and many of those who do rarely review it. Your financial future is too important to “set it and forget it.”

You could be missing out on several opportunities if your advisor never reviews your financial plan. Life changes. Markets change. Your goals change. Maybe last year you were on track to retire at 65. Now, recent events could mean you’re able to retire a year earlier, or perhaps later. 

You might even be at a stage where you want to cut back on work or save for your grandkids’ college. Without regular reviews, you can’t stay on track to meet your goals. 

A good adviser will:

• Review your plan often instead of setting it once and leaving it.
• Meet with you regularly to adjust your plan. 
• Stay aligned with your financial goals. 

If those conversations aren’t happening, then something important is missing. Small blind spots don’t stay small forever. Left unaddressed, they can snowball into bigger problems that impact your retirement timeline, lifestyle, and peace of mind.

Mistake #2: Giving Generic Advice

Another common mistake financial advisors make is taking a one-size-fits-all approach. Have you ever heard an advisor say you should always pay off your mortgage or keep everything in stocks? These recommendations sound great in theory, but they don’t work. Why? Financial advice has to be personalized because everyone’s situation is different. 

Pushing generic financial products is a big red flag. Giving this kind of cookie-cutter advice is like a doctor prescribing the same medicine to every patient. Good advisors ask questions, listen, and give recommendations that fit your personal goals.

Signs your adviser might be giving generic advice:

• They recommend the same products or strategies to everyone
• They don’t ask detailed questions about your goals and lifestyle
• They can’t explain why their recommendation is right for you specifically

SEE ALSO: The 5 Mistakes That Can Destroy Your Retirement Plans

Mistake #3: Taking Too Much Risk

Some of the most costly mistakes financial advisors make aren’t intentional. Most financial plans are built around a simple question. How much risk can you tolerate? But tolerance for risk isn’t a property strategy. The better question is, how much risk should you take to reach your goals?

Retirement success isn’t about having the biggest account balance. It’s about reaching your goals. Everyone has unique financial goals. Some individuals want to leave a large legacy, cover their healthcare needs, or simply have peace of mind. If you’re taking too much risk, you could run out of money too soon or never be able to enjoy it at all. 

Understanding Risk Tolerance Versus Risk Capacity

Your adviser should discuss your risk tolerance and risk capacity with you. You may want to take on more risk, and in certain cases, that can make sense. However, if the capacity isn’t there, meaning your plan cannot withstand a market decline and still meet your goals, then taking on more risk isn’t appropriate. 

This is a specific conversation your adviser should have with you.  

Mistake #4: Ignoring Tax Assumptions in Planning 

Another one of the most common mistakes financial advisors make is ignoring the taxes you’ll have to pay during retirement. Did you know retirement can be the most expensive tax season of your life?

Once you hit age 73, the IRS forces you to take withdrawals from retirement accounts. They’re called Required Minimum Distributions (RMDs). These withdrawals are fully taxable.  On top of that, up to 85% of your Social Security benefits can be taxed if your income is high enough. Add in Social Security (up to 85% of which can be taxed), capital gains, and dividends, and suddenly your tax bill can skyrocket.

If you need to sell investments in retirement to cover a large expense, that extra income could push you into a higher tax bracket and even raise your Medicare premiums. You want to keep your money, not hand it over to the IRS because of poor planning. 

A smart plan looks ahead. That might include:

• Roth conversions during lower-income years
• Tax-efficient withdrawal strategies
• Coordinating which accounts to draw from

Your adviser doesn’t have to provide direct tax advice, but they should collaborate with tax professionals and raise these issues early.

SEE ALSO: Planning for Early Retirement: Accelerating Savings and Investment Goals

Mistake #5: Skipping Healthcare Costs

Healthcare is one of the biggest wild cards in retirement. However, it’s easy (and common) to overlook. According to Fidelity’s 2025 Retiree Health Care Cost Estimate, a 65-year-old retiring this year can expect to spend about $172,500 on healthcare throughout retirement.

While you were in your working years, your healthcare insurance was most likely covered by your employer, and the rest was taken out of your paycheck. In retirement, it’s a different story. A well-rounded financial plan should include healthcare costs. Sometimes, financial advisors don’t include healthcare in the estimated costs of living. 

Medicare isn’t free. Part B, Part D, Medigap, and supplemental coverage all come with premiums. If your income is too high, those premiums can climb fast. On top of that, you’ll need to plan for prescription drugs, hospital visits, and even long-term care. Ignoring healthcare costs now can lead to financial strain later.

Mistake #6: No Advisor Collaboration

The last mistake we’ll cover today is not helping you build a team. No financial advisor can do it all, and the best ones don’t try. Strong financial planning requires collaboration among people with diverse skill sets and expertise. 

That might mean:

• A CPA to minimize taxes
• An estate attorney to help protect your legacy
• A Medicare expert to choose the right plan

Your financial plan is so much more than investments. You can’t forget about taxes, legal documents, and insurance. If your adviser isn’t coordinating with other professionals, you could miss critical pieces of the puzzle. Think of it like building a house. You wouldn’t hire an architect but skip the electrician or plumber. Your financial plan deserves the same teamwork.

How to Help Protect Yourself from Financial Mistakes

Do financial advisors make mistakes? Everyone makes mistakes, but the important part is knowing how to spot them. Avoiding these mistakes starts with asking the right questions and expecting more from your financial plan. 

Here are a few ways to stay ahead:

• Ask your adviser how often they’ll review your plan. Annual or semi-annual check-ins should be the standard.
• Make sure tax planning is part of the discussion. Even if they can’t give direct tax advice, your adviser should be coordinating with your CPA.
• Confirm your plan includes healthcare costs. From Medicare premiums to long-term care, a good advisor will factor these numbers into your retirement projections.
• Ask if your adviser collaborates with other professionals. A good plan involves teamwork, like tax pros, attorneys, and insurance experts. 

By asking the right questions and making sure key areas are covered, you can feel more confident that your plan is working for you.

Final Thoughts on Smarter Financial Planning

When it comes to financial planning, it’s often not the big, obvious mistakes that cause the most damage, it’s the little oversights that add up over time. Ready to see if your financial plan has any blind spots? At Paces Ferry Wealth Advisors, we specialize in building strategies that adapt to your life and goals. Schedule a consultation today and take the first step toward a more confident financial future.

Book a call with us to explore what’s possible and build a strategy that fits your future.

Paces Ferry Wealth Advisors, LLC is a registered investment advisor with the U.S. Securities and Exchange Commission (“SEC”).  This material is intended for informational purposes only. It should not be construed as legal or tax advice and is not intended to replace the advice of a qualified attorney or tax advisor.