How to Find a Financial Advisor
Money isn’t everything, but everything about it matters. When you’re looking for someone to help you manage and grow your money, you want to be sure you trust that person and the firm they work for. Benzinga explains why this decision is important and offers suggestions on how to find the best financial advisor for you.
Understand the Types of Advisors You Can Choose From
Financial advisors assist clients with investment choices, and you can choose from different types of advisors. The terms financial advisor, investment advisor and financial planner (even wealth manager) are often used interchangeably. They have specific differences, but each expert gives advice on how to manage money. You could hire an advisor with their own company, an advisor who is a small cog in a massive multibillion-dollar investment conglomerate wheel or an expert somewhere in between.
Financial advisors may also help with money management, create financial plans, give general financial advice or sell financial products. Regardless of their title, professionals who receive payment for giving advice on investing in securities must be registered. The people who are in the business of buying and selling stocks, bonds, mutual funds and other securities are called brokers or registered representatives. They make trades on behalf of clients in exchange for a fee, commission or both.
Like investment advisors, brokers have to pass exams and register with the SEC, but they are regulated by the Financial Industry Regulatory Authority (FINRA). You can look up brokers you are considering working with on the regulatory authority's BrokerCheck site. You can look up an advisor or firm you are researching on the SEC advisor search website.
One major difference between brokers and investment advisors has to do with the standards under which they must operate. Investment advisors are bound to a fiduciary standard that requires them to always put the clients’ best interests first. Brokers, on the other hand, must adhere to a suitability standard. This means the broker must have a reasonable basis for believing that his or her recommendation is suitable for you based on your current situation.
Financial planners are different from investment advisors or brokers in that they offer advice on total financial health (cash flow, debt, employee benefits, retirement, insurance, taxes and estate planning) without giving investment advice on what securities to buy. A financial planner can help clients figure out how much of their assets they might want to commit or allocate to an investing strategy, but unless the planner is also registered as a financial advisor, they can’t legally offer specific investing advice. This, in turn, improves cash flow, aids in tax planning, asset allocation, etc.
When you work with a financial planner, they are going to be privy to everything from student loan debt to investment products you use, debt repayment plans, your emergency fund and much more.
Determine What Kind of Help You Want and Need
An individual soul search or a meaningful conversation with your partner is the best place to start before you look for a financial advisor. From there, you can evaluate what you actually need help with. There’s your dream retirement to consider. Risk management is a concern. Investment management is helpful when you don’t know what to do. Tax advice can protect your funds. You have your retirement savings to manage, and you should also consider insurance coverage that you need for now and in the future.
A financial advisor can help set you straight if you are facing any of these life experiences:
- A major life change like marriage, divorce, or kids
- Debt issues
- Worries about retirement
- Possible layoff from your job
- Issues with your business
- A recent windfall
If you have financial assets you’d like to invest and the rest of your financial life is rolling along smoothly, all you might need is a financial advisor like one you could matched with through a search conducted by Datalign Advisory. If you need general financial advice, you could consider working with a financial planner or a financial advisor who is also adept at financial planning.
Moreover, you’re speaking with someone who can enlighten you on items like:
- Interest rates and their impact on your portfolio
- Credit card debt
- New insurance coverage you should purchase
As you uncover what you truly need, you can better determine the type of professional in which you should rely.
Decide How Much You Want to Pay
Compare fees — whether it’s an hourly rate or monthly percentage of the assets you have with the firm — before you make a decision. Reputable firms are upfront about what they charge and what you will pay.
Research Your Options
Spend some time researching financial advisors. You can opt for a general search by typing “financial advisors near me” into Google, or you can access a search entity like Datalign Advisory to tailor a search for a financial advisor who will meet your specific needs.
If you’d like to find a financial advisor to invest your money, Benzinga’s selection of the top financial advisors can help. Browse each advisor’s investment strategy and schedule a consultation when you find a strategy that appeals to you.
If you feel like you want to start with a financial planner, you could access the searchable online database of Certified Financial Planners® (CFPs) at LetsMakeAPlan.org.
Once you narrow down your choices, set up a meeting. The majority of financial advisors and planners offer a complimentary introductory meeting. The SEC’s Investor.gov site suggests asking these questions when you evaluate possible financial advisors:
- Are you registered with the SEC, a state, or FINRA?
- May I have a copy of your firm’s latest Form ADV, including the brochure and the brochure supplement?
- Have you, the firm or any supervised persons ever been disciplined by any regulator? If yes, for what reasons and how was the matter resolved?
- Have you ever been sued by a client who was not happy with your work or the services you provided or the products you recommended?
- How are you paid for your services? What is your usual hourly rate, flat fee, or commission?
- What experience do you have, especially with people in my circumstances?
- Where did you go to school? What is your recent employment history?
- What products and services do you offer? Are you only supposed to recommend a limited number of products or services to me? If so, why?
Datalign Advisory makes it easy for you by matching you with an advisor who meets your needs and preferences.
Which Financial Services Do You Need?
Financial advisors provide a wide range of services. At their most basic, a financial advisor will manage your investment and retirement funds and assets for you, buying and selling investments in custodial brokerage, retirement, bond, real estate investment trust (REIT) and alternative investment accounts. Some financial advisors provide additional services like financial planning, tax preparation and strategies, retirement advice, college planning, estate and legacy management, career guidance or advice on starting a company.
- Financial planning: If you’re not sure where you are headed financially or if you don’t have much in the way of assets to invest, your best bet might be to hire a financial planner. A CFP® is considered the gold standard in financial planning.
- Investment advice: If you have money that you want to invest, a licensed financial advisor can review your risk tolerance and invest your money for you. Financial advisors cannot guarantee a return, so be sure you understand the risk involved.
- Fiduciary commitment: If you hire a fiduciary financial advisor, they must act in your best interest at all times. Fiduciary status means that they seek the best prices, terms and products for your situation; act in good faith in all their advice to clients; and avoid conflicts of interest.
What Type of Financial Advisor is Right for You?
In addition to ensuring that the advisor you choose is qualified to skillfully provide the financial services you need, the best financial advisor for you is a person you like and feel comfortable with. If you like the firm but don’t like the investment advisor representative assigned to you, ask for a different person. This is the person you will call for some of the most intimate advice you’ll ever ask for, so you want to make sure it’s a good fit.
- National chain: If you feel most comfortable with big names like Fidelity Investments Inc., Charles Schwab Corp., UBS Group AG and others of that type, you can get started online with one of their national advisors or find a local representative to connect with in person.
- Independently owned firm: A boutique firm in your town — or anywhere in the U.S. if the company provides remote service in your state — will provide full-service investment advice without the franchise feel of a big name.
- Financial advisor search site: Firms like Datalign Advisory ask you questions to determine the kind of financial advisor that would best meet your needs, then set you up with possible matches.
Benzinga’s Best Financial Advisors
Best for Retirement Advice: Datalign
By utilizing data-driven insights, Datalign Advisory aims to empower consumers to make informed decisions and achieve their financial goals. How are you empowered when you use this platform? Datalign Advisory helps connect you with the appropriate financial advisor based on individual circumstances and preferences. The platform will connect users with vetted fiduciary advisors from the network, along with personalized guidance and assistance.
The beauty of the platform is that you get focused, transparent and user-driven services. Plus, you avoid hidden fees and fine print that can get in the way as you try to make the most of your money.
- Data-driven results ensure that you can see the whole picture of what you need and how a financial advisor can help
- Fiduciary advisors are bound ethically to serve your best interests
- This platform, while powerful, may not offer the level of human insight that you’re looking for
Best for Comparing Advisors: SmartAsset
SmartAsset is a unique platform that asks all the right questions and puts you in touch with the financial advisor that you need. Take a short quiz when you set up your account, learn what you can do to make the most of your money and use their calculators to see how much it costs—to live.
SmartAsset connects you with an advisor that allows you to build around your family’s goals, but this professional works for you. They leverage their experience and expertise to make your life better, and you can maintain that relationship for decades, learning about how to manage your mortgage, bank accounts, savings, credit cards and much more.
- Connecting with a financial advisor quickly is better for your financial future
- You can learn more about the whole of your finances from an advisor, not just your investments
- The platform allows you to learn quite a bit on your own, but that cannot substitute for what your advisor might tell you
Best for New Investors: WealthSimple
WealthSimple offers you automated investing, Halal investment account, low fees and the opportunity to invest in something that’s truly good for the world and society at-large. Halal accounts have a selection of 50 stocks from which they can choose that have been carefully screened. ESG accounts focus on investments in green technology, advanced tech and companies that aim to make the world a better place.
You can get started today, pay fees that are often lower than half a percent, and let the platform make your investments on your behalf. This means that you can let the platform know what you want, change your strategy at any time and remain on the right side of history.
- The ESG focus of this platform is best for the planet and your future earnings
- Low fees ensure that you can dedicate more money to your financial future
- Automated investing is not for everyone, and you want to make sure you know what you’re doing before starting
Best for Buy-and-Hold Investors: Vanguard
Investing with Vanguard helps you get 2 of the best things in the investing world today:
- Easy access to Vanguard ETFs and funds
- Access to a Vanguard financial advisor
Yes, you will need quite a bit of money to get started, but you pay low fees and connect with one of the biggest names in the business. If you’re not sure where to start, speak with a financial advisor, share your goals, explain what must be paid for and allow a Vanguard portfolio to change your relationship with your money.
*Paid non-client promotion. Benzinga receives compensation when a reader provides certain personal information to Vanguard after clicking “Get Started” on this page.
- Vanguard has a range of ETFs that are good for conservative investing
- The firm is very large, making it easy for you to get customer care and information
- Vanguard is a robust investment house, but you may want more diversity in your portfolio than primarily their products
Best for Preparing for Retirement: Retirable
With Retirable, you can build a customized retirement plan with assistance from a certified financial planner. What’s unique about this platform is that it does much more than pile cash into a retirement account. The fiduciaries that you work with can:
- Offer dynamic retirement advice and support
- Help you manage cashflow
- Ensure that you’re making retirement plans that match your funds
- Help you make changes to your retirement plans as needed
Remember, if your account gets below $33,000, you will incur around $250 in fees. At the same time, you are matched with a personal financial planner that can help you plan to retire, pay for college, help your spouse in an end-of-life situation, start a new business, handle medical bills and more. You can change your retirement plan at any time, and you can maintain your relationship with your financial advisor for as long as you please.
- You can learn how to manage your cashflow before and after retirement
- You can get real-time insights from an expert
- You can also plan for your spouse and family
- This platform may not work well for beginners in their retirement journey
Frequently Asked Questions
Are financial advisors expensive?
Fees and costs to hire and use a financial advisor vary widely. Some advisors charge a percentage fee based on the assets under management (AUM) with their firm. If, for example, your advisor charges 0.75% of AUM per year and they manage a $200,000 portfolio for you, you would pay $1,500 per year for that service. If, in addition to the AUM fee, the advisor charges performance fees, wrap fees, surcharges, commissions, trading or other additional fees, you would pay more. Research all the fees your advisor charges by asking them and by using the SEC’s Investment Adviser Public Disclosure (IARD) website to examine the advisor’s Form ADV Part 2 Brochure and Form CRS, if applicable.
Should a small business hire a financial advisor?
Small businesses benefit from the advice of financial advisors and financial planners as well as attorneys, and a consultation with an expert should be a first stop before you set up a new business. The choice of entity is a decision you’ll make as a business owner before you open, and that choice has ramifications down the line for your business and personal tax situation.
Should you hire a financial planner for your family?
Families that have extensive holdings, assets or investments may want to consider hiring a financial planner who can help with long-term plans for that money, especially succession.