Financial advisors or planners advise individuals on wealth management and other personal money matters. To find a planner, start with recommendations from colleagues, friends, or family members who seem to be managing their finances successfully. An accountant or lawyer can make a referral. Sometimes, professional associations can offer help.
Traditional financial advisors also typically charge a percentage of the amount managed, with a median fee of 1%, although it may be higher for small accounts and lower for large ones. Others may charge a flat rate, an hourly rate, or an advance payment. We also have a list of 10 questions you should ask a financial advisor, including whether they adhere to a fiduciary standard, what their fee structure is, and how often they will communicate. As another example, you can ask a financial planner to draw up a comprehensive financial plan or to review your current situation.
The National Association of Personal Financial Advisors (NAPFA) is a good place to start your search for help. Alana Benson is an investment writer who covers topics of socially responsible investing and ESG, financial advice and investing for beginners. You can use Financial Advisor search engines to enter specific criteria for the type of advisor you are looking for. If you have a complex financial life, you may want to work with a traditional financial advisor or online.
A financial advisor can handle all of that research for you, reducing cognitive overload and greatly simplifying the investment process. A financial advisor who deals primarily with clients who are retiring or who are about to retire might not be a good fit for you if you are a 30-year-old professional looking for a financial plan. After seeing your financial profile from a bird's eye view, they may be able to tell you if there's anything else you should prioritize. If you are looking for someone with a more retirement-focused approach, you may want to look for a Chartered Retirement Planning Counselor (CRPC) who has completed intensive training in retirement planning through the College of Financial Planning.
These financial experts can help you navigate life events that affect your finances, such as planning for retirement, sending your children to college, or managing a small inheritance. In return, commission advisors respond that those who are paid based on their AUM are more likely to recommend financial strategies that increase their AUM, even if they are not in the best interest of the client. NerdWallet's comprehensive review process evaluates and ranks companies that provide online financial planning services or connect users with a financial advisor. The important thing is not to refuse to work with someone who uses an “o” instead of an “e”, but rather that the world of financial professionals and their positions can be shady; no matter what the person's degree, you need to apply for their certifications, verify them, and make sure their professional appointments match your needs.
Finding a financial advisor or planner may seem intimidating at first, but it's worth it if your portfolio is too large to manage on its own. While a financial advisor can provide you with extensive financial advice, a financial planner takes a more detailed approach to your finances.