People turn to financial advisors for help managing their money and reaching their financial goals. Financial advisors offer a range of financial planning services, these can include investment management, budgeting advice, to estate planning. Choosing the right financial advisor for your specific needs is important.

What is a financial advisor?

A financial advisor is a professional who provides financial services to clients. The right financial advisor will assess your finances as they currently are, and then identify areas for improvement based on the financial goals you have discussed with them.

How to choose a financial advisor depends on your personal preferences and specific financial goals. There are different types of financial advisors, and you will want to consider your financial goals when selecting the type of financial advisor you work with.   

Are there different types of financial advisors?

Yes, there are different kinds of financial advisors.

Below is an overview of each type of financial advisor and what they do:

Certified Financial Planner (CFP):

These professionals have gone through lengthy educational requirements and passed a test to market themselves as CFPs. If you have complicated financial circumstances, or ambitious financial goals, then working with a CFP can be a good idea. You can trust that they’ll provide beneficial advice, as their title indicates that they have gone through rigorous training and testing.

Investment Advisor:

An investment advisor is an official title for Registered Investment Advisors (RIAs). These professionals offer advice regarding client investments as well as managing portfolios.  All investment advisors are held to a fiduciary standard, which means they are legally bound to act in the clients’ best interest. Best Interest means that they must make recommendations that will truly help the client reach their financial goals, without exposing the clients’ assets to unnecessary risks.

Registered Representative (RR):

Is a professional, sometimes referred to as a broker, who is licensed to sell life insurance and mutual funds. Typically, they work for broker-dealers and are regulated by the Financial Industry Regulatory Authority (FINRA). The main thing that sets Investment Advisors and Registered representatives apart is that RRs are not paid by clients, but rather through commissions they earn from trading stocks and bonds.

Financial Consultants & Wealth Managers:

These are more generic titles that do not require licenses or certifications. If someone is marketing themselves under these titles then it doesn’t mean that they are less knowledgeable, they just haven’t undergone the same regulatory process as other financial advisors.

Robo Advisors:

An automated, algorithmic investment platform with minimal supervision. Robo advisors are a more inexpensive route to go if you are looking for a financial advisor to manage your investments. Robo advisors are generally the best choice if you are in need of investment help. If you are either looking to put money towards retirement, have a lump sum you’d like to invest, or have little to invest, then the algorithms in place should be enough to help you progress towards your goals.

There are different types of financial advisors that you can consider when making your decision, it’s also important to determine whether you will meet with your advisor in person or online.

Here are some things to consider.

In-Person vs. Online Financial Advisors: 

Online Financial Planning Services:

This is a good option for you if you prefer to work with someone, but also want the convenience of meeting over the phone or zoom. This way, you have the convenience of having an algorithm handle the majority of your investments, while at the same time having a team of financial advisors you can reach out to with questions.

If you have a specialized goal, such as finding an advisor who can find discrepancies in your current finances or finding an advisor who can help you plan for retirement, then it can be easier to find online services that specialize in those interests.

In-Person Advisor:

In-person advisors are a great option if you need someone a bit more hands-on. Sometimes it can feel even easier to get to know your financial advisor if you are meeting with them face-to-face versus via zoom or a phone call.


Who needs a financial advisor? 

If you’re wondering if you need a financial advisor, you probably do!

Everyone should make financial plans for the benefit of their own future. You may be thinking that you can’t work with a financial advisor due to their cost, but hiring someone who is knowledgeable is worth the investment. You can potentially save and invest much more money when you collaborate with a Financial Advisor. You generally call a plumber when you have a leaky pipe as opposed to trying to fix it yourself, so why not apply this same principle to your finances?

How much does a financial advisor cost?

There are a few things to consider when planning the cost of hiring a financial advisor.

These factors can include the complexity of your financial situation, how ambitious your end financial goal is, and the type of advisor you select to work with. If you select to work with a Robo-advisor then you will likely pay less than if you select to work with an in-person financial advisor.

Another factor that determines the cost you’ll pay is the method that the financial advisor has chosen. Some financial advisors will charge a percentage based on the amount of money that they are managing for you, others will charge an hourly rate. If your financial advisor charges based on a percentage, then a common range is anywhere from .25-1% per year. If your financial advisor charges an hourly rate, then a common range can be anywhere from $200-400.

The other common way a financial advisor may manage their payment is by implementing a “per plan” fee. If you are seeking an advisor to help you create a financial plan, then they may charge anywhere from $1,000-3,000 for the plan.

While these are common ranges, it doesn’t mean that these are the only prices that your financial advisor may charge. When looking for an advisor, it’s important that you ask them if they pay by a percentage, hourly, or per plan. That way, you can better understand what your potential costs may include.

What is the difference between a financial planner and a financial advisor?

An individual usually seeks professional help when they need help managing their money. Both financial planners and advisors help people manage money efficiently and effectively.

There are many financial advisors who offer financial guidance, but financial planners specialize in that area. However, financial planners are less focused on investments, whereas financial advisors can offer a balance between investing and financial planning.

Financial planners are professionals who take a thorough look at your finances and from there help organize and develop a strategy to meet their long-term and short-term financial goals.  They create a well-organized roadmap for you so you can make the right financial decisions.

Financial advisors are those who look at your investment goals, portfolios, and building wealth. They are able to give you the best advice on which next steps you should take in order for you to grow your money in the most efficient way possible.

How to choose a financial advisor?

Before proceeding with your financial advisor, figure out your financial needs first to decide whether this is the route you would like to go.

You must check their credentials and make sure they have worked with people who have a similar financial situation as you. Not all financial advisors have degrees or certifications relevant to the finance industry. You want to work with a financial advisor who has a CFP. A CFP is a certified financial planner certificate that financial advisors obtain once they pass a rigorous exam. The exam ensures that they have a strong grasp of any financial situations they may face on the job.

Making sure the financial advisor you select has the right qualifications and years of experience in the industry is crucial. A thorough background check on your potential financial advisor is in your best interest, as it will ensure that your advisor will do their very best to set up your finances for success. 

You may find it difficult to find the right financial advisor to suit your needs. Whether you prefer to work online or in person, Ageras helps you find the best most qualified financial advisor near you. Get 3 free quotes from one of our amazing client consultants. From there you will have access to choose the best financial advisor in your niche. 

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