Why Small Business Owners Need a Financial Adviser

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Business owners often have more complex personal finances than other households. Their income may fluctuate, their assets may be tied up with their company, and they face special tax and retirement planning considerations that employees never encounter. This complexity can make long-term planning difficult without professional support. 

A financial adviser can help business owners take a long-term view on building personal wealth, protect their assets, and create a path toward retirement or an eventual exit from the business. This article shows you what a financial adviser can do for your personal finances, how to choose the right one, and what credentials matter most.

What can a financial adviser help business owners with?

• Tax planning
• Retirement planning
• Succession and estate planning
• Investing
• Debt management
• Cash flow management

Here are some of the most common ways financial advisers help business owners strengthen their personal finances:

Tax planning

Tax planning helps business owners keep their personal and business finances organized, compliant, and strategically aligned. This includes navigating tax obligations that affect your personal return—such as pass-through taxation (when you report business profits on your personal tax return), arranging estimated quarterly payments, and planning for major taxable events like selling the business. 

Financial advisers can also help you identify potential deductions, evaluate the tax impact of your business structure (e.g., sole proprietorship versus S corp), and understand tax benefits available to business owners—including the Qualified Business Income (QBI) deduction, which allows eligible owners to deduct up to 20% of pass-through income. 

Advisers with accounting experience—especially certified public accountants (CPAs)—can help you structure your finances efficiently and prepare for both short-term obligations and long-term tax considerations.

Retirement planning

For many entrepreneurs, retirement savings are closely tied to the success of their business. A financial adviser can help ensure your future isn’t dependent solely on the business by creating a personal retirement strategy that stands on its own. 

Retirement plans differ in contribution limits, eligibility, and administrative requirements, so choosing the right one depends on the size and structure of your business. Advisers can help evaluate and select the right retirement plan. A single-owner business with no employees, for example, might choose between a Solo 401(k) or an SEP IRA. A business owner with employees might choose between a traditional or safe harbor 401(k), or a SIMPLE or SEP IRA.

A human financial adviser can also help you determine contribution amounts, coordinate required employer contributions (if applicable), avoid common tax pitfalls, and ensure your retirement savings remain diversified. Advisers periodically review these plans as your income, business stage, and comfort level with financial risk change.

Succession and estate planning

Succession and estate planning help business owners protect both their personal wealth and the business they’ve built. Advisers can help you plan how personal and business assets will transfer to heirs or beneficiaries in the event of death, disability, or an eventual exit. 

These plans typically include legal documents such as wills, trusts, and durable powers of attorney. They might also include a buy-sell agreement. A comprehensive plan designates who inherits what, outlines who can make decisions on your behalf, and helps ensure business continuity. Advisers work alongside attorneys to minimize taxes, avoid probate when appropriate, and keep the process clear for your family.

Investing

Investment advisers help manage your personal investment portfolio with special consideration for the financial reality of running a business—such as variable income, higher risk exposure, and concentrated wealth. Because many business owners have a significant portion of their net worth tied to the company, advisers help balance that concentration with outside investments.

Diversification strategy may include spreading investments across stocks, bonds, real estate, or other assets to reduce reliance on business performance. Most reputable investment advisers work with registered investment adviser (RIA) firms overseen by the US Securities and Exchange Commission (SEC), offering clients a fiduciary standard of care.

Debt management

Debt management strategies help separate personal and business obligations, allowing owners to prioritize repayment while still planning for long-term financial goals. Advisers can help determine the best order in which to pay down debts, assess the impact of variable income, and plan for major personal milestones like buying a home or funding education expenses.

High-level debt guidance may include evaluating refinancing options, restructuring debt for more predictable payments, reviewing interest-rate exposure, and understanding how credit decisions affect both personal and business financial health.

Cash flow management

Many business owners experience irregular income, making personal cash flow planning essential. Financial advisers help design personal budgets and liquidity strategies—ways to maintain access to cash when income fluctuates—that keep household finances steady during slower business cycles. 

This often includes building emergency funds, aligning savings schedules with business seasonality, and using tools like financial forecasting and personal cash flow tracking to ensure bills, savings, and investments stay on course.

How to choose a financial adviser

1. Define your financial goals
2. Verify qualifications
3. Evaluate experience and specialization
4. Compare fees and compensation
5. Interview potential advisers

When selecting a financial adviser, many individuals rely on the simple but effective “three Cs” guideline: competence, communication, and chemistry. 

This isn’t a formal financial framework, but it serves as a practical way to evaluate potential financial advisers. Look for those who are competent—knowledgeable, qualified, and experienced. Ensure they communicate clearly and respond promptly. Finally, consider chemistry—whether they understand your priorities, work well with you, and show genuine interest in your long-term financial success.

The steps below offer practical ways to evaluate which professional may be the right fit.

Define your financial goals

Clarify your financial priorities before beginning your search, as they will shape your selection. Do you want to save for retirement, create an estate plan, or diversify your investments beyond your business? Consider your available resources, risk tolerance (how comfortable you are with financial uncertainty), and long-term objectives. An effective adviser can help translate these priorities into actionable financial strategies—aligning investment approaches with your comfort level and structuring plans that fit your resources.

Verify qualifications

Once your goals are clear, the next step is to find an adviser whose expertise matches your needs. Different credentials signal different areas of focus, so choose someone whose background aligns with yours, whether that’s tax planning, retirement strategy, or investment management.

Recognized credentials are the calling card of any financial adviser. While designations vary, these are among the most common:

• Certified Financial Planner (CFP). CFPs offer retirement, estate, investment, and tax management support. The CFP Board regulates CFPs, who earn their credentials through training and standardized exams.

• Personal Financial Specialist (PFS). PFAs are certified public accountants (CPAs) who complete additional training on holistic financial planning. They have the advantage of accountant-based financial training, with tax management and reporting specialization.

• Chartered Financial Analyst (CFA). CFAs focus on investment strategy, portfolio management, valuation, and risk analysis. They earn credentials through multiple exams regulated by the CFA Institute.

• Registered Investment Adviser (RIA). RIAs are advisory firms that specialize in investment management and investment advice. They register with the SEC and have a fiduciary duty to act in clients’ best interests.

Evaluate experience and specialization

After confirming credentials, look more closely at how each adviser applies their expertise. Credentials show what an adviser can do—experience shows what they actually do.

Business owners should consider advisers experienced in serving clients with variable income, complex taxes, or wealth tied to private business. Explore how they’ve helped others in similar circumstances balance personal financial planning with business responsibilities. 

Strong financial adviser candidates generally have multiple years of experience, a manageable client load, and familiarity with clients whose financial goals resemble your own.

Compare fees and compensation

After identifying qualified candidates who offer the services you need, evaluate how they structure their fees. Financial adviser fees vary by model. Most financial advisers charge a percentage of assets under management (AUM)—often 0.25% to 1%—while others charge hourly rates, monthly subscriptions, or a flat fee.

• AUM fees are common for investment management and ongoing portfolio oversight. 

• Hourly fees work best for project-based or one-time financial planning, such as creating a retirement plan or reviewing tax strategy.

• Flat or subscription fees often suit those who want ongoing access to a financial adviser without tying costs to investment size.

Fee details should be clearly disclosed and easy to compare across providers.

Interview potential advisers

With a shortlist of candidates in hand, schedule introductory consultations to assess fit. This is an opportunity to get to know your potential adviser, gauging how they communicate, whether they understand your goals, and how their approach compares to others.

Use these conversations to evaluate expertise, responsiveness, and compatibility. Prepare a standard list of questions about pricing, communication, and financial philosophy so you can make objective comparisons and select the adviser who best fits your financial situation.