Lawyer vs. Financial Advisor: Which Do You Need?

Financial lawyers and financial advisors both help protect your finances, but they serve different purposes. A financial lawyer handles legal matters like estate planning, contracts and disputes, while a financial advisor focuses on managing money, investments and long-term strategies. Which one you choose depends on whether you need legal help, financial planning or both. Together, they can provide support for complex financial situations.

If you’re looking to hire a financial advisor, consider using our free matching tool to connect with fiduciary advisors who serve your area. Get started today.

What Does a Financial Advisor Do?

A financial advisor offers wealth management and financial planning advice. Their expertise covers various topics, including investments, retirement plans, insurance, estate planning, saving for college and more.

There are many types of financial advisors, each with different certifications, licenses and expertise. And some financial planners specialize in certain products or types of clients.

It is important to find an advisor whose expertise and skills match your financial goals and needs. Below are seven types of services that financial advisors may offer:

What Does a Lawyer Do?

Clients filling out a questionnaire to work with a financial advisor.

Lawyers advise clients in legal matters and represent them in courts to protect their interests. The lawyer and their legal team represent them when suing a person or business or defending their client in civil or criminal court. They file the appropriate paperwork with the court and advise their clients on the best courses of action. They then search for evidence to protect their clients and research case law to substantiate their arguments.

While some people think lawyers focus solely on court cases, their expertise goes beyond that part of the profession. Other services that attorneys provide include:

Review or draft contracts
Create wills and living trusts
Prepare paperwork for real estate transactions
Craft partnership agreements
Mediate disputes
Negotiate agreement terms
Send demand letters

Lawyer vs. Financial Advisor: Key Differences

The primary difference between financial lawyers and financial advisors depends onn their areas of expertise.

Lawyers focus on legal matters, ensuring compliance with laws and regulations, while financial advisors concentrate on building wealth and then managing that wealth. While both may overlap in areas, such as estate planning or tax strategies, their training and objectives differ.

Lawyers typically hold a Juris Doctor (JD) degree and must pass the bar exam in their state. Financial advisors, on the other hand, often hold certifications like Certified Financial Planner™ (CFP®) or Chartered Financial Analyst (CFA). These credentials reflect their knowledge in financial planning and investments rather than legal matters.

Lawyers work to resolve legal disputes or ensure compliance with laws, often focusing on protecting assets through legal structures. Financial advisors, by contrast, help clients optimize their finances, focusing on strategies to build wealth and meet future goals.

Lawyer vs. Financial Advisor: Which Do You Need?

If you are involved in a legal dispute or need legally-binding documents, such as a will, trust or business contract, a financial lawyer is often the appropriate professional to hire. They ensure that all legal formalities are met, minimizing the risk of disputes down the road.

When faced with lawsuits or a required court appearance, only a lawyer can provide representation. They can advocate on your behalf, handle negotiations and guide you through the complexities of legal proceedings.

If your goals involve building a financial plan, managing investments or planning for retirement, a financial advisor can be very beneficial. They can help create a tailored strategy that aligns with your income, financial goals and risk tolerance.

Although not a replacement for tax professionals, many financial advisors are skilled in recommending tax-efficient strategies to maximize wealth. They can guide you in areas like charitable giving, estate planning and long-term investment growth.

Questions to Ask Before Hiring a Lawyer or Advisor

Before you settle on a lawyer or financial advisor to hire, it’s important to do your due diligence. Here are some questions you’ll want to consider asking lawyer before hiring one:

What is your experience with cases similar to mine?
Are you familiar with the laws in my state or jurisdiction?
What are your fees, and how are they structured?

Likewise, as you interview financial advisor candidates, ask the following questions:

What certifications do you hold, and what services do you provide?
How are you compensated – fee-only, commission-based or a combination?
Can you provide examples of how you’ve helped clients achieve similar financial goals?

Can You Benefit from Both Professionals?

One area where lawyers and financial advisors frequently collaborate is estate planning. While an estate planning lawyer drafts legal documents, such as wills and trusts, a financial advisor ensures your assets are allocated effectively to meet your financial goals. Working together, they provide a comprehensive approach to wealth management and legacy planning.

For business owners or high-net-worth individuals with significant assets, both professionals may be necessary. A lawyer can handle legal contracts, intellectual property and compliance issues, while a financial advisor can manage assets and investments, succession planning and cash flow strategies.

Bottom Line

A financial advisor reviewing a strategy with a client.

When deciding between a financial lawyer vs. financial advisor, you have to understand each professional’s duties and how they fit into your financial needs. A financial planner specializes in wealth management and financial planning, while an attorney creates legal documents and provides advice based on current laws. For investors, the best approach is to create a team of advisors that will protect your assets and position you for future wealth.

Tips for Protecting Your Assets

Financial advisors and attorneys offer services and products to protect your assets. One of the easiest ways to protect your assets is by buying life insurance. It is an affordable option that provides money to your heirs to replace your income and ensure that they are taken care of. Our life insurance calculator estimates how much life insurance you need based on your answers to a few quick questions.
If you want to protect your assets, you can build a team of professionals that offer guidance and advice when you need it most. SmartAsset’s free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.