This article explains what a financial advisor does for a growing business, including key responsibilities, types, and how to choose the right advisor. If you’re an owner of a growing business, understanding the role of a financial advisor is essential for making informed decisions, maximizing profits, and ensuring long-term success. We’ll cover the core duties of financial advisors, the differences between personal and business financial advisors, how to select the right advisor for your needs, and why this expertise is crucial as your company scales.
Summary: What Does a Financial Advisor Do?
A financial advisor helps individuals and businesses manage their money and plan for their financial future. Their primary responsibility is to understand clients’ financial goals and help them develop a plan to reach those goals.
A financial advisor provides expert guidance for managing money and creating personalized plans for investments, budgeting, insurance, taxes, and estate planning.
Definition: What Is a Financial Advisor?
A financial advisor provides expert guidance for managing money and creating personalized plans for investments, budgeting, insurance, taxes, and estate planning. For business owners, this means having a professional partner who can help you interpret financial data, make strategic decisions, and align your money management with long-term company goals.
Note: Business advisors assist with employee retirement plans, succession planning, and cash flow management, which often overlaps with the services provided by financial advisors for businesses.
Quick Answer: What a Financial Advisor Does (and How Bennett Financials Fits In)
A financial advisor for businesses in the $1M–$20M revenue range isn’t the same as a personal financial advisor managing your IRA. At this stage, your company needs someone who understands your entire financial picture—not just investments, but cash flow, profitability by service line, tax positioning, and growth strategy.
For service-based companies, a modern “financial advisor” often functions as a strategic partner or Fractional CFO rather than a broker selling investment products. This person sits alongside leadership, interprets the numbers, and helps you make decisions with confidence.
Key responsibilities of a business-focused financial advisor:
- Clarifies financial goals: Translates vague ambitions into specific targets with dates and dollar amounts
- Builds forecasts: Creates 12-month and multi-year projections so you can plan hiring, marketing spend, and capital needs
- Improves margins: Identifies where profit leaks out and recommends concrete fixes
- Reduces tax liability: Designs year-round strategies that lower your effective tax rate legally
- Manages cash flow: Ensures you can cover payroll, invest in growth, and handle surprises
- Prepares for exits or acquisitions: Models valuations and structures deals to maximize after-tax proceeds
Bennett Financials provides Fractional CFO and advanced tax strategy services built specifically for this work. We go beyond traditional personal financial advice to deliver comprehensive financial planning that integrates compliance, bookkeeping, and forward-looking strategy into one cohesive system.
If you run a U.S.-based service business and want proactive financial leadership, schedule a consultation with Bennett Financials to see how this applies to your situation.
Transition: Now that you have a quick overview, let’s dive deeper into what a financial advisor is and how their role differs for businesses.
What Is a Financial Advisor for a Business?
Personal financial advisors help families and individuals plan for retirement, save for education expenses, and build investment portfolios. That’s valuable work—but it’s not what a growing business needs.
A business financial advisor is a professional who helps owners interpret financial data, make strategic decisions, and align money decisions with long-term company goals. Many advisors begin their journey in an entry level position within finance before advancing to more strategic roles. They translate raw numbers into action plans. They spot problems before they become crises. They help you operate like a CEO instead of a glorified bookkeeper.
In the $1M–$20M revenue range, this role is often filled by a Fractional CFO instead of a full-time C-suite hire. Why? A full-time CFO in 2026 can cost $250,000+ annually with salary and benefits. Most companies at this stage don’t need 40 hours a week of CFO work—they need 10-20 hours of high-impact strategic guidance.
Financial advisors for businesses can be generalists or specialists in strategic finance, tax planning, or industry-specific issues. Some focus exclusively on SaaS metrics. Others specialize in professional services firms like law practices or medical practices. The right advisor understands the nuances of your business model. Earning certifications such as Certified Financial Planner (CFP) can help establish trust with clients and demonstrate a commitment to ethical standards. It can also be helpful to earn a certification such as a Certified Financial Planner (CFP), Chartered Financial Analyst (CFA), or Personal Financial Specialist (PFS).
Bennett Financials positions itself on the “strategic partner” end of the spectrum, integrating bookkeeping, compliance, and forward-looking planning into a unified approach. We serve agencies, consultancies, SaaS companies, cybersecurity firms, and professional practices—businesses where the financial advisor’s role extends far beyond filing returns. When evaluating an advisor, it is important to check their background through the Financial Industry Regulatory Authority (FINRA) to ensure trustworthiness. The field of personal financial advisors is experiencing strong job growth, with the BLS projecting about 55,000 openings annually through 2033, growing at a rate much faster than the expected growth rate for all occupations.
Transition: With a clear understanding of what a financial advisor is, let’s look at the different types of advisors available and how they serve both individuals and businesses.
Types of Financial Advisors
Choosing the right advisor starts with understanding the different types of financial advisors available in today’s market. Each type brings a unique set of services, expertise, and approaches to helping clients plan for their financial future. Whether you’re an individual looking to build your personal financial plan or a business owner seeking comprehensive financial planning, knowing your options ensures you find the advisor best suited to your financial needs.
Main types of financial advisors:
- Personal Financial Advisors: Focus on helping individuals and families manage their personal financial life. Services include retirement planning, education savings, debt management, investment portfolios, insurance, and estate planning.
- Investment Advisors: Specialize in investment advice and portfolio management, helping clients select investment products such as mutual funds, stocks, and bonds. They tailor strategies to match risk tolerance and financial objectives.
- Certified Financial Planners (CFPs): Qualified professionals who have met rigorous education, examination, and experience requirements. They provide a holistic approach to financial planning, covering tax laws, retirement accounts, insurance, and estate planning.
- Robo Advisors: Digital platforms that use algorithms to provide automated investment management. Cost-effective for basic portfolio management and straightforward financial needs.
- Business Financial Advisors and Fractional CFOs: Specialize in working with businesses, offering services such as cash flow management, margin improvement, tax strategy, and financial forecasting. They help business owners interpret financial data, make strategic decisions, and align their financial plan with long-term goals.
- Insurance Advisors: Focus on risk management, helping clients select appropriate insurance policies to protect assets, income, and business operations. They may also advise on employee benefits and business continuity planning.
When evaluating your options, consider your current financial situation, the complexity of your financial needs, and the level of personalized service you require. The right advisor will offer services that align with your goals—whether that’s building wealth, managing risk, or scaling your business.
Transition: Now that you understand the different types of advisors, let’s explore what a financial advisor actually does for business owners.
What Does a Financial Advisor Do for Owners and Their Companies?
A financial advisor’s responsibilities shift depending on whether they serve individuals, families, or businesses. But the core function remains the same: planning and decision support. The advisor can help you see clearly, decide confidently, and execute consistently.
Key Responsibilities
For business-focused advisors, typical duties include:
- Reviewing financial statements: Monthly P&L analysis, balance sheet review, cash flow tracking
- Building budgets: Annual operating budgets tied to revenue targets and margin goals
- Creating forecasts: 13-week cash flow projections, rolling 12-month revenue models
- Assessing profitability: Margin analysis by service line, client, or project
- Advising on debt and financing: Evaluating lines of credit, SBA loans, or revenue-based financing
Many financial advisors stop at historical reporting—telling you what happened last quarter. The good advisor goes further: they help you turn vague goals (e.g., “grow to $10M by 2028”) into concrete financial targets and action plans.
Investment management is another key duty, involving recommending or selecting investments and developing an investment strategy based on the client’s risk tolerance and goals.
Bennett Financials emphasizes integrating tax planning into everyday operational decisions, not just year-end compliance. When you decide to hire a senior team member, expand into a new market, or adjust pricing, there are tax implications. We help you see them in advance.
This requires ongoing collaboration: regular review meetings, KPI tracking, and adjustments as markets shift or business models evolve. Your current financial situation today isn’t where you’ll be in 18 months. The plan needs to evolve with you.
Transition: Let’s break down these responsibilities further, starting with strategic planning and goal setting.
Strategic Planning and Goal Setting
Strategic planning isn’t bookkeeping. It’s about setting direction for the next 3-5 years and building the financial infrastructure to get there. Effective strategic planning requires understanding not just business finances, but also the client’s personal aspirations and holdings in various accounts, to ensure a truly holistic approach.
Turning Goals into Action Plans
A financial advisor helps clarify specific goals with dates and amounts. Instead of “I want to grow,” you define: “Reach $5M in annual recurring revenue by December 2027 with 20% net margins.” That’s a target you can actually plan against.
From there, advisors translate these goals into:
- Annual budgets that allocate resources toward priorities
- Quarterly milestones that track progress
- Cash flow targets that ensure you can fund growth
Bennett Financials builds multi-year financial models for agencies, SaaS, and professional service firms to test different growth scenarios. What happens if you add two salespeople in Q2? What if your largest client churns? What’s the break-even timeline on that new service line? These questions have quantifiable answers.
For example, if you’re planning a 2030 exit, we model what the business needs to look like in 2028 to command a 5-6x EBITDA multiple. If you’re considering acquiring a smaller competitor in 2026, we map out the cash requirements, integration costs, and payback period. This is how you create a financial plan that actually drives decisions.
Transition: With clear goals in place, the next step is managing cash flow and improving margins to support growth.
Cash Flow Management and Margin Improvement
Cash is oxygen. You can be profitable on paper and still run out of money. This is where many financial advisors fail their clients—they report results but don’t manage cash proactively.
Tools for Cash Flow Management
A Fractional CFO analyzes revenue streams, separating recurring income from project-based revenue, and maps monthly expense patterns to stabilize cash flow. They identify margin leaks: unprofitable service lines, overstaffing, inefficient vendor contracts, underpriced offerings.
Key tools include:
- 13-week cash flow forecasts: See exactly when cash gets tight so you can act early
- Rolling 12-month P&L analysis: Track trends, not just snapshots
- Project-by-project margin reviews: Know which work makes money and which doesn’t
Bennett Financials routinely helps clients in the $1M–$20M range add multiple points to EBITDA margins through pricing adjustments, service packaging, and cost control changes. One agency we worked with discovered their highest-revenue client was actually their lowest-margin relationship—absorbing 30% more hours than scoped. Restructuring that engagement added $180,000 to annual profit.
This is practical, immediate value. It’s debt management, working capital optimization, and margin improvement rolled into ongoing advisory.
Transition: Beyond cash flow, business owners must also make smart investment and risk management decisions. Here’s how a financial advisor supports those choices.
Investment, Financing, and Risk Management Decisions
Business owners face investment decisions constantly. Should you fund growth with debt, equity, or retained earnings? Should you take on that line of credit to support a new product line in 2025? What happens if your top client representing 40% of revenue decides to leave?
Scenario Modeling for Investments
A financial advisor connects high-level theory to real-world business decisions. Risk management isn’t abstract—it’s about understanding client concentration, economic trends, and regulatory changes that could impact cash flow.
Bennett Financials evaluates the impact of large investments (new software platforms, senior hires, office expansion) on break-even points and payback periods. We model scenarios:
- Best case: New hire ramps in 6 months, generates $300K in new revenue
- Base case: Ramp takes 9 months, revenue hits $200K
- Worst case: Hire doesn’t work out, you’re down $150K in salary and opportunity cost
This is different from simply “getting a loan approved” or buying index funds. Strategic finance means understanding how every major money decision affects your financial future and making choices with full visibility into potential risks.
Transition: One of the most impactful areas for business owners is tax planning. Let’s look at how proactive tax strategy can drive value.
Tax Planning and the Layering Method
Proactive vs. Reactive Tax Planning
Tax is where business financial advisors create or destroy the most value for owners. The difference between reactive compliance and proactive strategy can be hundreds of thousands of dollars over a decade.
Traditional advisors often only handle compliance—filing returns by April 15 each year. Proactive advisors design strategies throughout the year, integrating tax planning with operational decisions so you pay what you legally owe and not a dollar more.
The Layering Method Explained
Bennett Financials uses what we call the Layering Method: stacking entity selection, compensation strategy, deductions, credits, and long-term planning to lower effective tax rates systematically.
Example scenario: A profitable marketing agency structured as a single-member LLC is paying 37%+ in combined federal and self-employment taxes. By restructuring into an S-Corp with a holding company in 2024-2025, optimizing owner salary versus distributions, and implementing a cash balance pension plan, the owner reduces their effective rate to 24%—saving $85,000 annually that can be redirected into hiring, marketing, or acquisitions.
This approach requires understanding tax laws at a deep level and integrating that knowledge with your business operations. It’s not about gimmicks or aggressive positions. It’s about using every legal tool available to shield profits and support scalable growth.
Transition: Now that you know what a financial advisor does, let’s compare the roles of Fractional CFOs and traditional financial advisors for growing businesses.
Fractional CFO vs. Traditional Financial Advisor
The term “financial advisor” covers a broad range of professionals. A retail financial advisor typically manages investments and retirement accounts for individuals. A Fractional CFO is embedded in your business, managing the full financial picture.
Comparison Table:
Dimension | Traditional Financial Advisor | |
|---|---|---|
Primary focus | Personal investments, retirement planning, insurance policies | Business cash flow, margins, forecasting, tax strategy |
Scope of work | Investment portfolios, social security planning, college savings | P&L management, KPI dashboards, exit planning, financing decisions |
Time commitment | Ongoing: 10-20 hours monthly with regular meetings | |
Typical outcomes To better understand the potential benefits and risks involved, read Fractional Shares Explained: Pros and Risks 2025. For e-commerce businesses looking to understand their profitability, it’s important to realize that high ROAS doesn’t always lead to high profit. Learn more in Why ROAS is Lying to You: The E-commerce Guide to Contribution Margin. | Portfolio returns, retirement readiness | Margin improvement, reduced tax burden, exit-ready financials |
Cost structure | % of assets under management (0.5-1.5% AUM) | Monthly retainer or project fees ($3,000-$10,000/month) |
For companies between $1M and $20M, hiring a full-time CFO in 2026 could cost $250K+ annually with bonuses and benefits. A Fractional CFO delivers CFO-level insights at a fraction of that cost—typically $36,000-$120,000 annually depending on scope and complexity.
Bennett Financials operates as an ongoing strategic partner, meeting monthly or weekly with leadership to steer financial direction. We’re not checking in once a year to rebalance a portfolio. We’re in the trenches with you, tracking KPIs, adjusting forecasts, and making sure every financial decision supports your long term goals.
Transition: If you’re considering a Fractional CFO, here’s how our engagement process works.
Our Fractional CFO Engagement Process
Our engagements follow a structured process designed to create clarity fast:
- Discovery and Diagnostic: We review your recent financial statements, tax returns (last 2-3 years), organizational structure, and owner goals. This first meeting establishes where you are today and where you want to go.
- Foundation Building: We clean up books and establish standardized reporting across income statement, balance sheet, and cash flow. If your current financial situation is messy, we fix that first.
- Dashboard Implementation: We set up KPI dashboards tracking metrics that matter for your business:
Gross margin by service line
Customer acquisition cost
Lifetime value by client type
Operating cash burn rate
Revenue per employee
- Gross margin by service line
- Customer acquisition cost
- Lifetime value by client type
- Operating cash burn rate
- Revenue per employee
- Ongoing Advisory: With the foundation in place, we layer in tax planning, scenario modeling (worst/base/best case for 2025-2027), and exit planning if relevant. Monthly meetings keep leadership aligned and decisions data-driven.
This holistic approach turns finances from a source of stress into a competitive advantage. Explore our Fractional CFO services for exact deliverables and timelines.
Transition: But when is the right time to bring in a financial advisor or Fractional CFO? Let’s look at the signs your business is ready.
When Does a Business Need a Financial Advisor or Fractional CFO?
Not every business needs an advisor from day one. But many wait too long and lose profit and tax savings they can never recover.
Clear signals you’re ready:
- Revenue plateauing between $1M–$3M and you’re not sure why
- Unpredictable cash balances that make it hard to plan
- Owners taking irregular distributions because nobody knows what’s safe
- Surprise tax bills in April that could have been avoided with planning
- No monthly financial reports beyond a basic P&L from your bookkeeper
- Major decisions made on gut feel instead of data
We often see businesses at this stage in specific industries: marketing agencies, IT and cybersecurity firms, consultancies, law practices, and medical practices. These are service businesses with real revenue, growing complexity, and owners who are too busy delivering client work to also be the CFO.
Major life and business events that warrant strategic financial support:
- Planning to sell in 2029? Start preparing financials now
- Admitting a new partner in 2027? Structure it right from the beginning
- Opening a second location in 2025? Model the cash requirements first
The goal is proactive, not reactive. Get help before missing payroll or breaching a loan covenant—not after.
Signs Your Current Financial Setup Is Holding You Back
Here are specific pain points that signal it’s time for qualified professionals:
- You’re always “busy” but genuinely unsure if the business is profitable
- You have no clear monthly financial reports—just bank statements
- Tax surprises hit every April because nobody planned ahead
- Constant stress about upcoming expenses and whether you can cover them
- You make hiring or marketing decisions based on gut feels, not data
- You only meet your accountant once a year for taxes
- You cannot answer basic questions like “What’s our true net margin on our top service line?”
If leadership can’t answer that margin question, a Fractional CFO can close the gap. Bennett Financials regularly begins engagements after owners experience these exact frustrations. They want a repeatable financial system—not another spreadsheet they won’t look at.
Transition: Understanding how financial advisors are compensated is also key to making the right choice for your business.
How Financial Advisors Are Compensated (and Why It Matters for Businesses)
Compensation structures create incentives. Understanding how your advisor gets paid helps you evaluate whether their advice is truly aligned with your interests.
Common compensation models:
- Fee-only: Flat fees or hourly rates with no product commissions
- Fee-based: Combination of fees and commissions
- Commission-only: Paid by selling financial products (insurance policies, investment products, etc.)
- Assets under management (AUM): Percentage of assets (typically 0.5-1.5% annually)
For business-focused advisors, fee-for-service is standard. Strategic advisors charge project fees or monthly retainers tied to scope, not commissions on products they sell you.
Bennett Financials uses transparent, scoped fees tied to ongoing advisory and Fractional CFO services. We don’t earn commissions on insurance, loans, or investment options we recommend. Our incentive is simple: help your business perform better so you keep working with us.
Before hiring any advisor, ask:
- How are you compensated?
- What’s included in the fee?
- Are there any potential conflicts of interest?
- Do you receive referral fees or commissions from any recommendations?
Fiduciary Duty and Alignment of Interests
A fiduciary is legally required to put client interests first and disclose conflicts. This matters because not all advisors operate under this standard.
Some advisors—particularly those at large firms focused on selling stocks, annuities, or insurance—operate under a “suitability” standard. They must recommend products that are “suitable,” but not necessarily the best option for you. The difference is significant. If you’re interested in understanding how companies can maximize value beyond just product recommendations, explore these capital allocation strategies for growing companies.
Bennett Financials’ role as a strategic finance partner is to optimize your business’s financial health, not to sell specific financial instruments. We succeed when you succeed. That alignment shows up in how we scope work, set expectations, and measure results.
Practical guidance for maintaining alignment:
- Get a written scope of work with clear deliverables
- Agree on performance metrics upfront
- Establish regular check-ins to review progress
- Maintain transparency about what’s working and what isn’t
For founders planning long-term exits, having a truly aligned financial partner is critical. The decisions you make in 2025-2027 directly impact your valuation and after-tax proceeds in 2030. Misaligned advice during that window is expensive.
Transition: Once you’re ready to meet with a financial advisor, here’s what to expect and how to prepare.
What to Expect When You First Meet a Financial Advisor
Reputable advisors treat the first meeting as a mutual evaluation, not a sales pitch. You’re assessing them. They’re assessing whether they can actually help you. If you’re wondering when to hire a fractional CFO, this guide can help you determine the right time for your startup.
The typical discovery process includes:
- Reviewing recent financial statements (P&L, balance sheet, cash flow)
- Examining tax returns from the last 2-3 years
- Understanding your organizational structure (LLC, S-Corp, C-Corp, holding companies)
- Clarifying owner goals for income, wealth, and lifestyle
Come prepared to answer key questions:
- What income do you need from the business personally?
- Do you have an exit timeline in mind?
- What’s your risk tolerance for growth investments?
- What are your growth ambitions for the next 3-5 years?
- Where do you feel most uncertain about your finances today?
Bennett Financials uses this first conversation to identify gaps in reporting, tax strategy, and financial planning. We then outline a proposed roadmap: what we’d tackle first, what outcomes to expect, and what the engagement would look like month-to-month.
Ask about the advisor’s experience with businesses similar in size and industry. Clarify communication cadence:
- Will you meet weekly? Monthly?
- Who’s your main point of contact?
- What reporting will you receive?
Questions to Ask Before You Commit
Before you sign an engagement letter, get concrete answers:
Results and track record:
- “What results have you delivered for businesses between $1M and $20M in revenue?”
- “Can you share a case study or anonymized example of a similar client?”
Tools and processes:
- “Will you build a monthly KPI dashboard?”
- “How will we handle tax planning during the year, not just at filing time?”
- “What software or systems do you use?”
Collaboration:
- “How do you work with our existing CPA, bookkeeper, or attorneys?”
- “Who on your team will I interact with regularly?”
Reporting: See healthcare finance and reporting solutions for medical practices from Bennett Financials.
- “Can I see a sample monthly reporting package?”
- “What does a typical advisory meeting look like?”
Bennett Financials can coordinate with your existing clients plan, working alongside CPAs, bookkeepers, and attorneys to create a unified approach. We’re not here to replace your existing relationships—we’re here to add strategic leadership on top of them, offering expert insights and media coverage that further bolster your clients’ financial outcomes.
Comfort level, communication style, and transparency matter as much as technical expertise when choosing an advisor. Trust your instincts on fit.
Transition: Ultimately, is a financial advisor or Fractional CFO the right move for your business? Here’s how to decide.
Is a Financial Advisor or Fractional CFO Right for Your Business?
Traditional financial advisors help individuals with retirement and investments. That’s important for your personal financial life. But growing companies also need strategic financial leadership inside the business—someone who understands your financial needs as an operating entity, not just as an individual.
If your finances are reactive—if you’re constantly surprised by cash shortfalls, tax bills, or margin erosion—you’re leaving money on the table. That’s money that could fund hiring, marketing, or your eventual exit.
The primary benefits of partnering with a firm like Bennett Financials:
- Lower tax burden through year-round planning, not just April compliance
- Improved margins by identifying and fixing profit leaks
- Clearer forecasts that let you plan with confidence
- Exit-ready financials that command premium valuations when you’re ready to sell
If you own a service-based business in the U.S. generating $1M–$20M annually, ask yourself: Is your current financial setup giving you the clarity you need? Can you answer basic questions about margin, cash runway, and tax exposure? If not, that’s the gap a Fractional CFO fills.
The difference between reactive accounting and proactive financial leadership is the difference between surviving and scaling.
Schedule a consultation with Bennett Financials to turn tax burdens and financial chaos into structured growth and long-term wealth building. We’ll review your current setup, identify the gaps, and show you exactly what a strategic finance partnership looks like for your business.
Frequently Asked Questions (FAQs)
What qualifications do financial advisors typically have?
Most financial advisors hold a bachelor’s degree, often in finance, accounting, economics, or related fields. Many also pursue certifications such as Certified Financial Planner (CFP), Chartered Financial Analyst (CFA), or Personal Financial Specialist (PFS) to enhance their expertise. Some advisors may further their education with a graduate degree to advance their career.
How does a financial advisor help with business growth?
A financial advisor for businesses acts as a strategic partner by analyzing financial data, creating forecasts, managing cash flow, improving margins, and developing tax strategies. They help business owners make informed decisions aligned with long-term goals, ensuring sustainable growth and profitability.
What are the different types of financial advisors?
Financial advisors come in various types, including personal financial advisors, investment advisors, certified financial planners, robo advisors, business financial advisors, and insurance advisors. Each type offers specialized services tailored to individual or business financial needs.
How are financial advisors compensated?
Financial advisors may be compensated through fee-only arrangements, fee-based models, commissions, or a percentage of assets under management (AUM). Understanding their compensation structure is important to ensure their advice aligns with your best interests.
When should a business consider hiring a financial advisor or Fractional CFO?
Businesses should consider hiring a financial advisor or Fractional CFO when facing challenges like unpredictable cash flow, plateauing revenue, tax surprises, lack of clear financial reporting, or when making major strategic decisions such as expansions or preparing for an exit.
What can I expect during my first meeting with a financial advisor?
The first meeting typically involves reviewing your financial statements, discussing your goals, understanding your financial situation, and assessing how the advisor can help. It is also an opportunity to ask about their experience, services, compensation, and communication style to ensure a good fit.
