“The best financial advisor is the one who can get me the best returns.” We hear this all the time. But this is a very incomplete way of thinking.
It’s not so much that wanting great returns is wrong. If that were the case, multi-billion-dollar hedge funds wouldn’t exist.
Focusing too much on returns is an incomplete way of thinking for many reasons – not to mention achieving “market-beating” returns is a Jot tougher than most people think.
The Market Beats You More Often Than Not
Historically, trying to beat the market has been (and still is) a losing game for most investors. Consider 2019, when one study by S&P Dow Jones Indices found that over a 10-year period, 85% of large-cap fund managers underperformed the S&P 500. Over a 15-year period, 92% of them under-delivered.
Unsurprisingly, almost no hedge funds beat the S&P 500 in 2024, either. Simply put, half of all hedge funds fail.
So, if multi-billion-dollar hedge funds with hundreds of analysts and data scientists have trouble outperforming an ETF anyone can buy, beating the market feels more like a stroke of luck than a stroke of genius. The average financial planner might be able to do it for a year or two, but in general, it’s incredibly difficult.
Great financial advisors don’t chase returns. They know there’s no point in trying to outperform. They’re simply trying to perform.
Smart financial planning is about much more than your annual returns.
That’s why smart financial planners focus on what they can actually control. Because that’s where real value is created.
Good Financial Planners Control the Controllables
The best Certified Financial Planners (CFPs) don’t spend their days speculating on the price of Tesla or trying to time the market. Instead, they help clients manage the aspects of
wealth-building within their control: goals, savings habits, risk exposure, taxes, and estate planning.
Market returns are unpredictable, but building a structured financial life is not. Long-term financial success depends far more on repeatable behaviors and good planning than on market timing.
In fact, when comparing top-tier advisors, investment returns are often similar. That’s because they’re all playing the same long game – matching market performance and minimizing avoidable losses.
So, if your advisor is promising above-market returns year after year, it’s worth asking: At what risk?
Instead of chasing unrealistic gains, a wise financial planner helps clients achieve steady, sustainable, tax-efficient growth, which often proves more impactful than flashy returns.
But then, if good financial planners aren’t working on chasing market-beating returns, what do they actually do?
It boils down to what I like to call the “Five Disciplines.“
The Five Disciplines of Effective Financial Planning
Instead of focusing solely on investing, a holistic financial planning approach considers five interdependent disciplines:
1. The Overarching Plan
It all starts with purpose.
Before diving into spreadsheets, numbers, or allocations, you need to understand what your client cares about. This process – sometimes called “vision crafting” – is inspired by thought leaders like Simon Sinek, Bill Bacharach, and Norm Trainor.
Good advisors ask the hard questions:
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- What’s important about money to you? Why?
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- If money were no object, how would you spend your time?
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- What legacy do you want to leave?
- What legacy do you want to leave?
Once the “why” is defined, a great advisor treats every client’s finances like a business:
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- What’s your net worth?
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- What’s your income vs. spending?
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- What does your 5-year and 30-year financial trajectory look like?
And perhaps, the single most important question of all:
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- What are you most afraid of?
Good financial planning is as much about helping people achieve their dreams as it is about avoiding their nightmares.
With this full picture, planners help uncover hidden inefficiencies, prioritize goals, and design a roadmap that adapts as life evolves.
2. Planning Is Complex: There Are 27+ Financial Instruments
Financial security isn’t just about what you grow – it’s also about what you protect. In many ways, it is not different from a mechanic tuning up a car. an advisor reviews all financial “parts” to see what‘s working, what needs cleaning, and what should be replaced.
Some clients have solid disability or life insurance. Others may have outdated or underperforming policies. A strategic advisor helps retain what’s effective, remove what’s broken, and fill any protection gaps.
In recent years, we’ve seen numerous environmental catastrophes leave families financially devastated-often because they didn’t have flood insurance or windstorm coverage. Just because something hasn’t happened before doesn’t mean it won‘t happen in the future.
Because when life throws curveballs – like illness, accidents, or lawsuits – preparedness can mean the difference between recovery and ruin.
3. Planning for Life, Not Just Growth
Taxes are often the single biggest drain on wealth. That’s why smart tax planning is one of the most powerful ‘levers’ you can pull in any financial plan.
A high-quality advisor evaluates what we refer to as the 4 major taxes:
Current tax:
- These are the income taxes you pay on your earnings-whether from a W-2, K-1, business income, or other sources
Ongoing taxes:
- These are the taxes you pay on the Investments and savings you have: capital gains, dividends, and interest
Distribution taxes:
- When you move from ‘person at work’ to ‘money at work,’ you may face taxes on reallocations, retirement withdrawals, and required minimum distributions
Ultimate taxes:
- AAEstate taxes: Transfers to heirs and charitable giving
By minimizing unnecessary taxes through tax-loss harvesting, Roth conversions, charitable strategies, and trust structures, advisors unlock exponential value. As the saying goes, “It’s not what you earn. It’s what you keep.”
4. Money Management
Yes, investing matters. But it’s just one part of the picture. And most advisors offer similar returns. Where differentiation happens is in the how and why behind investment decisions.
When it comes down to it, there are really only five ways to build wealth:
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- Born into it
- Marry into it
- Own real estate
- Own a business
- Generate savings
You can’t control your birth, and marrying into wealth often depends on whether you’re born into it. Owning enough real estate to make you wealthy or running a wildly successful business happens, sure. But for most people, true financial growth comes from sound decision-making and discipline, not risky bets.
In other words, generating savings.Avoiding mistakes (like misallocated assets or speculative investments) is far more powerful in the long run than getting lucky with some stock picks once in a while.
5. Estate and Asset Protection
Estate planning isn’t just for the ultra-wealthy. Anyone with assets-or even just values they want to preserve – needs a plan.
Without clear instructions, wealth can be eroded by:
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- Probate and legal costs
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- Taxes (the federal estate tax exemption is $13.61 million in 2024)
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- Lawsuits, divorces, or family disputes
Properly structured trusts, asset protection plans, and gifting strategies ensure your wishes are honored and your legacy is protected.
Estate taxes can be mitigated with the right planning. The best advisors make sure what you’ve built continues to benefit the people and causes that matter most to you.
Multi-dimensional Financial Planning
Financial planning done right isn’t about gambling on stock picks or trying to beat the market. It’s about aligning your wealth with your life-today, tomorrow, and for generations to come.
The best advisors don’t sell performance. They deliver value in the form of clarity, discipline, protection, and long-term peace of mind.
Because financial planning is not just about growing your money. It’s about building a life worth living.
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