A lot of financial advisors will offer a “free financial plan” or “free financial education” to get your attention. Sounds good, right? But here’s the catch: most of the time, their advice is tied to sales quotas, or they make big commissions if you buy certain products. That means the advice isn’t always for your best interest.

I’m here to show you how to spot the hidden incentives behind those “free” plans and fancy investment portfolios.

I’m Jim Pan, an advice-only certified financial planner. I learned the hard way on how to make better money decisions for myself, and I help my clients understand the why behind their money, avoid costly mistakes, so they can reach their goals much faster.

In this video, I’m going to break down the 5 biggest lies your financial advisor probably told you — and how to protect yourself.

Lie #1: “You need complicated products to get ahead” 

You’ve probably heard this one “The ultra high net worth are getting ahead with alternative investment products, and now it’s accessible to you.” Sounds enticing right? But most people don’t realize that the more fancy it sounds, the more money your advisor usually makes, not you.

Most high-income families I work with will do just fine with simple, low-cost strategies that help them save taxes. Complicated products often come with high fees, hidden risks, and usually not very liquid. This means the fees are eating into your returns, and you may not get your money when you need them.

I had a client who had over $500K invested in all sorts of private, alternative investments such as structured notes, private real estate funds, mortgage funds, etc. The fees were high, about 2% a year. Even worse, the client couldn’t tell me exactly what they owned, why they owned them, and they couldn’t get their money out quickly. In the end, all that complexity gave almost no extra gain.

They can simply achieve their goals by maximizing their TFSAs and RRSPs, and investing in diversified, low-cost index funds. You just need to be clear on your goals, and take the least amount of risk to get the return you need to reach your goals.

A good question to ask your advisor:

“What’s actually in the portfolio? Has there ever been a time investors couldn’t get their money? How much am I paying in fees, and what do I actually get?”

If the answers are vague or confusing, that’s a red flag.

Lie #2: “You should always diversify across various institutions”

Another thing I hear a lot is: “You should spread your money across lots of accounts and insurance policies to be safe.”

Sounds reasonable, right? But actually… it’s usually redundant and costs extra.

Real diversification isn’t about having 10 accounts at different banks. It’s about having the right mix of investments that fit your goals and comfort level with risk. Too many accounts and advisors can mean duplicate fees, missed filing or deductions, and conflicting advice.

I once worked with a doctor who had seven investment accounts at different places. When we looked closely, most of them held the same kind of funds. We helped her combine them into just three accounts — one TFSA, one RRSP, and one non-registered. We also switched her to lower-fee investments, saving her over $6,000 a year.

Now, everything’s easier to track, and she can finally see her full financial picture clearly.

A simple exercise you can do is to create an “asset map” — list all your accounts, how much is in each, and what each one is for. If you or your advisor can’t explain why it’s so spread out, it might be time to simplify.

Lie #3: “Net returns are more important than management fees” 

This is a big one. A lot of advisors like to talk about how much your investments earn. They’ll tell you active management is worth paying higher fees as it helps you “beat the market.” But those extra 1–2% in fees can cost you hundreds of thousands, even millions, over time. In fact, studies show that over 90% of actively managed funds don’t actually beat the index.

I met a couple in their late 40s with about $1 million invested in segregated funds. Those are investments sold through insurance companies that claim to offer extra protection. They were earning 8% a year after fees, which sounded great. But when we looked closer, they were paying 2.65% in fees every year!

Meanwhile, similar index funds with the same level of risk were earning 10.5% and only charged 0.15%. So, they could either make more money without taking on extra risk or lower their risk and still earn the same 8%.

That small 2.5% difference in fees added up to around $25,000 a year — or about $1.3 million over 15 years. That’s too much to pay for that “extra protection”. The extra protection just meant the investments could bypass probate if you name a beneficiary. But in their case, all their accounts were registered, which already allows that, so they were paying extra for a benefit they didn’t even need.

Now, I’m not against paying fees. Many fee-based advisors charge between 0.4% and 1.5%, and some truly earn it by focusing on financial planning and providing real value. But if your advisor only meets once a year to talk about investments returns, that’s probably not worth what you’re paying.

Here’s what you should ask your advisor when you see high fees on your investments:

“Can you put me in F-class funds to save on fees?”

“Do you offer index funds with lower costs?”

If they say “Those fees don’t matter, it’s all about net returns”, that’s a red flag.

Lie #4: “You need life insurance to secure your future” 

Life insurance is important, it protects your family financially if something happens to you. But the reality is: not everyone needs it. And even if you do, most people only need term insurance, not those fancy permanent ones.

A lot of advisors push expensive insurance products because they pay big commissions not because you actually need them.

One of my physician clients was told to buy a corporate whole life policy that cost $400,000 a year for 10 years to “save taxes.” It sounds enticing to him because he is in the highest tax bracket. But when we dug into it, the setup was complicated, involved taking out a large loan with ongoing interest payments to get the money out, and won’t actually help him retire with peace of mind.

We ran the numbers and showed that if he simply used that same money to max out his registered accounts and pay down his mortgage faster, he can still reach his retirement income needs, and a lot less stress. So the plan would’ve helped the advisor far more than it helped him.

That’s the problem, many advisors are specialists who focus on one thing, like saving tax, without looking at your full financial picture.

Insurance is used to reduce the financial impact on your family if something happens to you, not be sold as a way to “build wealth.” Most people are better off with simple term life insurance, income replacement like critical illness or disability insurance if needed, and investing extra money to grow wealth.

Take a look at your policies and ask yourself:

“What’s the real purpose of this insurance?”

“Am I overfunding this insurance while I still have RRSP or TFSA room?”

Focus on coverage that fills gaps, not products that pad commissions.

Lie #5: “We offer free financial plan” 

Finally, many advisors claim they offer financial plans for free or is included in their service. In reality, if a financial advisor says your plan is free, it’s because they are paid when you buy a product.

Most of the time, the “plan” is just detailed enough to point you toward the investment or insurance product they make money from. Now, to be fair, some advisors genuinely want to help. But they can’t be completely unbiased when they work in a system that pays them through commissions. So that so-called free plan is mostly a sales pitch dressed up as advice.

A real financial plan is different. It digs into every part of your life — your goals, income, spending, taxes, retirement, estate plans — everything. It takes hours of work and analysis, not a quick printout from a calculator. A proper plan connects all the pieces: your investments, insurance, and taxes, so everything works together. And honestly, something that valuable can’t be truly “free.”

Ask your advisor: “Is the plan you offer a comprehensive financial plan?”

“How does this plan bring the different areas of my finances together?”

“How does this plan update as my life changes?”

If they can’t answer clearly, they’re not offering a real plan, they are selling a product.

These “little lies” from advisors aren’t just annoying, they also cost you millions over time.

You are better off by keeping things simple. Focus on what matters to you, your goals, and work with a fiduciary certified financial planner who looks at your whole financial picture instead of just one piece of it. That’s how you protect your wealth and actually sleep better at night.

Remember: your money should work for you, not for someone else.

See you in the next one!