There is a financial advisor for every budget and financial situation. Here’s a look at the types of financial advisors, and how to choose the right advisor for you.
Financial advisors help people manage their money and reach their financial goals. They can provide a range of financial planning services, from investment management to budgeting guidance to estate planning. Picking the right financial advisor for your situation is key — doing so means you won’t end up paying for services you don’t need or working with an advisor who isn’t a good fit for your financial goals.
1. Know what financial services you need
Identify why you’re looking for financial help by asking the following questions:
- Do you need help with a budget?
- Do you want help investing?
- Would you like to create a financial plan?
- Do you need to get your estate plan in order or create a trust?
- Do you need tax help?
2. Learn which financial advisors have your back
Financial advisors go by many names: investment advisors, brokers, certified financial planners, financial coaches, portfolio managers. There are even financial therapists. So, who does what — and who can you trust?
Since some of the most common titles advisors use, including the term “financial advisor” itself, aren’t tied to any specific credentials, don’t assume that someone who uses an official-sounding title has any specific training or credentials. Anyone who gives investment advice (which most financial advisors do) must be registered as an investment advisor depending on their assets under management.
Some financial advisors have a fiduciary duty to their clients, meaning they are obligated to act in their client’s best interest rather than their own. Always work with a licensed, registered fiduciary — preferably one who is fee-only, which means the advisor is paid directly by you and not through commissions for selling certain investment or insurance products. Certified financial planners have a fiduciary duty to their clients as part of their certification.
3. Learn about financial advisor options
Financial advisors aren’t just available at your neighborhood advisory office or bank. There are lots of ways to get financial advice. The option that’s right for you will likely depend on your personal preferences, the services you need and your budget.
