A financial planner or advisor is an expert in wealth management, helping you make decisions about the use of your money including investments, insurance, and planning for retirement.

If you’re considering engaging a financial planner of any type, including a wealth manager, insurance specialist, or stockbroker, you’ll need to find someone who fits your needs.

We will provide you with the information you need to help you hire a financial planner that suits your lifestyle and that you can trust. Read on.

• How to Hire a Trusted Financial Planner
• How much money should you have before Hiring a Financial Planner?
• How Much Money Can an Advisor Save You?
• How do I find a Reputable Financial Planner?
• When Should You Hire a Financial Advisor?
• How do You Find a Financial Planner You Can Trust?
• Is it Worth The Money to Hire a Financial Advisor?
• How Much Does it Cost to Meet a Financial Planner?
• How Much Money Should You Have to Hire a Financial Advisor?
• 15 Steps to Follow When Hiring a Financial Advisor
• 6 Signs That Will Convince You to Hire a Financial Advisor
• How Much Money do I Need to Hire a Wealth Manager?
• One Time Financial Advisor
• Question You Should Ask Yourself Before Hiring a Financial Advisor
• Do I Need a Financial Advisor Quiz
• How to Hire a Financial Advisor in India
• How to Become a Financial Advisor
• Do I Need a Financial Advisor For my 401k?
• Should I Use a Financial Advisor or do it Myself?
• Can I Trust a Financial Planner?
• What is The Difference Between a Financial Planner And a Financial Advisor?
• Can a Financial Advisor Steal Your Money?
• Do Financial Advisors Make You Money?
• Do Banks Offer Free Financial Advice?
• How do Financial Planners Get Paid?
• What is The Average AUM For a Financial Advisor?
• What is The Difference Between a Certified Financial Planner and a Fiduciary?
• How do I Choose a Financial Planner For Retirement?
• How Many Hours a Week do Financial Advisors Work?
• Who Are The Best Financial Advisors?
• How do Fee Based Financial Planners Work?
• How Long Does it Take to Become a Financial Planners?
• Can a Financial Planner Give Tax Advice?
• Do Billionaires Have Financial Advisors?
• Which Bank Has Best Financial Advisors?
• How Often Should You See a Financial Advisor?
• Top 5 Financial Planning Firms

How to Hire a Trusted Financial Planner

When searching or looking to hire a trusted financial planner, a lot of factors need to be put into consideration before making a decision.

Read Also: Top Earning Certified Financial Planners

Remember that your hard earning money is at stake here, so it is important that you try as much as possible to make the right decision and choose the right financial planner, tax return melbourne

Step 1: Which Type of Financial Planner do you Need?

Decide whether you need an advisor. 

Financial advisors are an added expense, and many people do not hire one. But the decision to manage your own finances is a risky one. Deciding whether to hire a financial advisor involves carefully assessing your own abilities.

• If you have a working knowledge of investing and asset allocation and feel comfortable handling your own financial future, or if you have a financial plan that offers free investment advice, you might be able to forego a financial advisor.
• You will also need time and discipline in order to monitor your portfolio and make changes when market conditions shift.
• However, if the cost of having a financial advisor is not an issue for you; and/or if you have a complicated financial situation, have recently come into a large amount of money and need help managing it, or need help planning for retirement, a financial advisor can help you make the right choices to maximize your savings. One study found that 401(k) investors who had a financial advisor earned 3.32 percent higher on their investments than those who did not.

Choose the type of advisor you need. 

The type of advisor that you need depends on the complexity of your needs. Of course, a good advisor will help you understand your needs, but in general, you can assess what you’re hoping to gain from a financial advisor and then have a better idea of what type to look for.

• A Certified Financial Planner® (CFP®) must have a significant amount of experience and pass numerous exams to earn the CFP® title. This person will be trained in financial planning, taxes, insurance, employee benefits, estate planning and retirement. CFPs® are also required to maintain their certification with continuing education, meaning his information will be up to date. A CFP® is comparable to a master’s degree in financial planning. To find a CFP® in your community, go to: http://www.cfp.net/search
• A Registered Investment Advisor (RIA) works with high-net-worth investors (usually someone with a net worth over one million dollars). Your RIA will look at your long-term goals and offer advice while managing your portfolio. They charge a fee of about 1% of your invested assets per year, sometimes less.
• A Chartered Life Underwriter® (CLU®) specializes in life insurance and estate planning. A CFP® who wishes to set herself apart in these areas will earn a CLU® designation, which requires additional education and the successful passing of eight exams.
• A Chartered Financial Consultant® (ChFC®) requires the same education as someone with a CFP®, but there is no board exam.
• Robo-advisors are offered by online firms. This is just what it sounds like — instead of working with another human, an automated algorithm is used to help you manage your portfolio. You cannot use this service for estate planning or taxes.
• Someone who goes by the title investment counselor, wealth manager, or investment advisor should not automatically be considered the same as a CFP® or RIA. Without those designations, they do not have the combined education, experience, and certifications of these other professionals. In order to give advice on investing in securities in exchange for payment, they must be registered with the Securities and Exchange Commission, but be aware that general titles (like “wealth manager”) don’t tell you much about the person’s qualifications.

Learn the difference between commission-based, fee-based, and fee-only advisors. 

Financial advisors are often called brokers or dealers if they work for a financial company and earn their incomes based on commissions.

On the other hand, independent, registered financial advisors have no company affiliation or sales quotas and charge annual or monthly fees based on the amount of money they are managing for their clients.

Fee-only financial advisors provide financial advice are compensated by fees only, and do not receive commissions. Some broker-financial advisors, who advertise themselves as “fee-based”, get the best of both worlds (for them) by receiving both fees from their clients and commissions from products they sell.

These salesmen are the worst of all possible worlds for the investor, since paying fees to a salesman receiving commission from selling products does not eliminate conflict of interest, but just allows him to be paid twice.

• Commission-based brokers and dealers are often more affordable because they take a commission, not annual or monthly fees, though costs are relative to the results. Until very recently, brokers and dealers were not legally obligated to work in your best interest (in other words, they did not fill a “fiduciary” role); they could sell you a product (such as stock) that was not optimal for you. As of April 2016, brokerage firms must act under a fiduciary standard — they must act with your best interests in mind when it comes to tax-advantaged retirement accounts (such as a 401k). The rule will take full effect in 2018.
• A fee-only, independent advisor might be more expensive, especially if you are managing a very large amount of money. But many experts think that the service provided by an independent advisor is higher quality, since she can never relax. She has to make sure the client is always satisfied, year after year, or her fee will vanish with the client. Fee-only advisors claim that this arrangement could be expected to lead to a better performance by your investments.
• A “fee-based” advisor both charges fees to the client and receives commissions from selling investment products. It offers the worst of all possible worlds: high expense and conflict of interest.

Step 2: Find a Trusted Financial Planner

Solicit referrals from your family or friends. 

If an advisor has done well by someone you trust and respect, she’ll probably do well by you, too.

• Consider asking friends or colleagues who are managing a similar financial situation to yours, or who seem to be doing well with wealth management issues. Since asking about financial issues can be socially taboo, avoid asking about their financial situation or money management choices. Instead simply ask if they have a financial analyst that they are happy with that they feel comfortable recommending.

Get a recommendation from a professional. 

Certain professionals deal with financial planners on a regular basis and are well equipped to offer good recommendations.

• Consider asking an estate lawyer or a Certified Public Accountant (CPA), preferably one with whom you already have a professional relationship. That way, you can put a little more stock in their recommendation

Look for someone with certifications. 

Seventy percent of the people representing themselves as financial advisors end their education after acquiring their licenses, except for required annual continuing-education credits. It’s the other 30% that you are looking for.

• These are the people with initials behind their names representing professional designations. Look for CFPs®, CLUs®, RIAs, etc.
• Look for someone with at least a college degree, preferably in finance, economics, or business related field.
• Think long and hard before entrusting your money to someone who doesn’t take his profession seriously enough to seek all the education available. Your search could result in a list of several hundred advisors if you live in a large city.

Search for financial advisors in your community. 

Most financial advisors who have taken their professional advancement seriously will be members of one of the large professional associations.

• Look for fee-only certified financial planners through the Financial Planning Association or the National Association of Financial Advisors.

Step 3: Conduct an Interview for Prospective Planners

Ask a potential advisor about her approach. 

When you first sit down with a potential advisor, consider it an interview, with you as the prospective employer. After all, this is exactly what the situation comes down to.

With this in mind, you need to ensure that she is a good fit for your needs. Some questions to ask about her approach include:

• What types of clients does she normally work with? Does she have a lot of experience with people with a similar financial profile to yours, and who have the same financial goals?
• Who will be responsible for your account? Some financial advisors handle every aspect of their client’s account, while others work with a team or even delegate decisions to other people. If you are hiring her as your advisor, you need to know if others will be involved.
• What is her approach to financial planning or advising? Does she tend to stick to the client’s suggestions and goals, or challenge the client to consider new approaches to investing?
• Ask them how they use Modern Portfolio Theory to reduce risk, how much foreign exposure they recommend, their views on emerging market, and what they think about the value versus growth debate. If you suspect that the advisor’s knowledge consists of only buzzwords, head for the exit.
• Ask about their beliefs about market timing (also known as “tactical asset allocation”), stock picking, loss protection, or guaranteed returns. If they profess beliefs they can do any of these, avoid them like the plague.

Ask about their performance. 

Don’t be shy about asking for proof that this financial planner has a successful track record managing accounts. You must also ask about any disciplinary action or sanctions he has had in his career. The following are industry-specific documents you should request:

• Ask for Form ADV. This is a standard report that can tell you whether this financial planner has any conflicts of interest.
• Ask for a risk-adjusted performance record covering the last five years or more. He should be able to provide this in writing. This will show you how much risk was required to get a return on previous investments.
• Ask for referrals. A good financial advisor can give you the names of satisfied clients, and you should feel perfectly comfortable asking for them.
• Ask for a sample financial plan. This can be from a real client she has advised or a basic approach she might take to your own account

Inquire about how the advisor is compensated. 

Though there are risks and advantages associated with both fee- and commission-based advisors, knowing which you are dealing with is crucial to understanding how she will handle your account.

• A good advisor should be upfront about whether she is compensated through a fee or commission.
• Negotiate fees. Even if you have but a small portfolio, you should not pay over 1% asset under management (AUM). And if you have a large portfolio, you should be able to negotiate fees to 0.5% or less. A 1% AUM fee will cost one-third of your portfolio and a 2% AUM fee will cost over half of your portfolio over 40 years. If you invest $100,000 at age 25 at 7% return, you will have $1,497,446 at age 65 for retirement. But if you pay 2% AUM, you will end up with only $703,999. That could mean the difference between being able to retire versus having to continue working.

Ask if he is legally bound to act in your best interest. 

This is a legal concept known as “fiduciary,” and while some advisors are legally considered fiduciaries (generally, fee-based advisors), some are not. You must hire an advisor who will always act in your best interest, and a fiduciary agreement makes this legally binding.

• Get it in writing. A fiduciary advisor knows that he cannot act outside your best interest without risking a lawsuit.
• Some professionals are not considered fiduciaries under the law, but under the bylaws of the their organization, such as a Certified Financial Planner.® As a consequence, a CFP® is not legally bound unless the responsibility is delineated in a contract between adviser and client.

Trust your instincts. 

Sometimes, after all the interview questions are finished, you have to simply ask yourself how you feel about this person. Is this someone you feel comfortable with? Do you feel that you can trust this person?

• If you have a lot of wealth or a complicated financial situation, you will spend a lot of time in conversation with this person. You need to feel comfortable with her communication style and personality.

Step 4: When should look for a new Financial Planner?

Look for a new advisor if yours is inattentive. 

A good financial advisor should have multiple conversations with you, discussing your long term goals and assessing your plan.

• The industry standard is two in-person conferences per year and several telephone calls or emails to assess your progress. Any less than that and your financial planner will not be able to offer you sound advice

Look for a new advisor if yours doesn’t meet goals. 

One purpose of a financial advisor is to help you set and achieve your financial goals. If you follow your advisor’s advice and still do not meet your financial goals over time, find someone else.

Look for a new advisor if yours lets you be the dictator. 

While you are the boss, if your advisor acts as a true counselor, you should expect to hear a “no” from your advisor on occasion. While it is true that it is your money, a good advisor must act in your best interest, not kowtow to your every whim.

• She should decline to make any investment that she thinks is unwise, even if you want to make it

How much money should you have before Hiring a Financial Planner?

If you are currently living paycheck-to-paycheck, have little retirement savings, and can’t seem to make it to the next level of your financial goals, then think twice before you say that you cannot afford an advisor.

With the helpful planning and advice from the right advisor, you are more likely to meet your financial goals.

You can Hire a Fee-Only Planner

There are essentially three types of financial advisors: fee-only planners, fee-based planners, and commission-based planners. With fee-based planners and commission-based planners, you will pay less upfront.

However, these types of advisors work off of the commission of certain products, and because of that, their advice might be more biased. They might be pushier trying to get you to buy certain products and not always have your best interests in mind.

Yes, a fee-only advisor can cost you a lot more money upfront. If your advisor charges an hourly rate of $200, and it takes them five hours your first meeting to set up your plan, it can be daunting to pay the initial $1,000.

However, while the first two meetings with your advisor will be costly due to the amount of work they do to set up a personalized plan for you, your follow up meetings and check-ins should be much shorter and inexpensive.

Percentage-Based or Flat-Fee Planner

Another option to consider is a financial advisor that charges a percentage based on the assets they manage. This fee can range from 0.5% to 2%.

Usually, advisors that charge a percentage will want to work with clients that have a minimum portfolio of about $100,000. This makes it worth their time and will allow them to make about $1,000 to 2,000 a year.

Again, this might seem like a huge price tag to pay per year once your portfolio is that padded, but these advisors can be more motivated to grow your investments. The more your investments grow, the more money they will make from their percentage.

For certain services, such as an estate plan or will, it might be better to go with a flat-fee advisor. If an advisor charges you a set rate for the service, you will not have to worry about them racking up hours or whether you need to make any simple modifications.

How Much Money Can an Advisor Save You?

A financial advisor is an expense, and when you already have a tight budget, it can seem like a waste of money. However, think about how much money a financial advisor can save you and make you in a year.

If you pay on average $1,000-2,000 a year on an advisor, but they allow you to save an extra $2,000 a year from careful planning and boost your retirement savings $2,000 a year by diversifying your portfolio, then you will come up on top.

How do I find a Reputable Financial Planner?

Know Where to Look

At the beginning of the process, you should think about what type of financial advisor you want to meet with: fee-based or commission-based. Think about what you’re looking for.

Are you seeking help with investments and retirement planning, or simply someone to go to when you have questions? Some advisors include financial planning in their fees for managing your investments, while others charge a separate fee or hourly rate for advice.

As for where to find a financial advisor, there are several places, from the obvious to the unexpected:

• Use an online advisor search.U.S. News & World Report has an online database of financial advisors across the country. You can use the search to find advisors in your area and learn more about their specialties and experience.
• Ask friends, family or colleagues for recommendations. Obviously, you’ll be more likely to find somebody who will work with you if your friends, family members or colleagues are in a similar tax bracket as you are.
• The Garrett Planning Network. Garrettplanningnetwork.com offers a map of the United States where users can click on a state and find a listing of financial advisors who cater to the middle class.
• The National Association of Personal Financial Advisors. The association’s website, napfa.org, allows you to find a financial advisor near you. It isn’t for financial advisors who generally cater to the middle class, however. Still, you may want to take a look and see who shows up near your home.
• Robo advisors. You may want to consider an automated portfolio management service as a cost-effective option. For example, with Schwab Intelligent Portfolios you don’t pay advisory fees or commissions, though you will need $5,000 to get started. Meanwhile, Wealthfront, another popular robo advisor, has a $500 minimum account requirement, and only charges an annual advisory fee of 0.25% on all assets under management deducted monthly.
• The Accredited Financial Counselor website. “I would strongly encourage true middle-income people to look (at afcpe.org) for an accredited financial counselor,” says Justin Chidester, who is both an accredited financial counselor and a certified financial planner – as well as the owner of Wealth Mode Financial Planning in Logan, Utah.
• Search engines. This one may seem like a no-brainer, but the power of search engines can’t be overlooked. Chances are a search engine is how you found your way here. So if none of the above prove fruitful, consider a quick Google search for “financial advisor near me” or “financial advisor for the middle class.”

You’ve probably heard of certified financial planners, but accredited financial counselors have been around for a while too, according to Chidester.

“They often have a focus on helping low- and middle-income people, at affordable prices, with topics relevant to everyone – saving, budgeting, paying debt, improving credit, preparing to buy a home and working through poor habits with money,” Chidester says.

He adds that they can’t legally provide investment or insurance advice, but they can provide great education about any financial topic and point you in the right direction for those things.

Know What Questions to Ask

Are you looking for help with investments and retirement planning, or simply for someone to go to when you have questions? Knowing what you’re looking for in a financial advisor is the first step to finding the right advisor for you.

Knowing how to match an advisor to your needs is the second step. Ask any potential financial advisors these questions:

• What services do you provide?
• What type of clients do you typically work with?
• How will we communicate with each other? How often will I hear from you?
• Are you a fiduciary?
• How are you compensated? And how much will I be charged for your services?

Some advisors include financial planning in their fees for managing your investments, while others charge a separate fee for advice. As for how much you’ll pay, it will vary depending on where you live and the scope of the work you’re asking for.

Some advisors may charge a couple thousand dollars for a comprehensive plan; others may charge around $100 to $400 an hour to dispense financial advice.

Stephanie Genkin, founder of My Financial Planner LLC and a certified financial planner in Brooklyn, New York, charges hourly – as opposed to what’s known as “assets under management.”

Most fee-only advisors charge according to assets and therefore have minimum thresholds an individual needs to have in their investment account before they’ll even consider the person as a client.

How much is the minimum? It varies, of course, but often you’ll need at least $50,000 before many advisors will consider working with you.

“That means most middle-class people are automatically excluded from service as they don’t have enough in investments to manage,” Genkin says.

Genkin, who charges $250 an hour for her services, is also a fiduciary. That’s important to know because there are two standards that financial advisors adhere to.

If you’re working with a fiduciary financial advisor, he or she is legally bound to put your needs before their own. A financial professional who has a suitability requirement is legally bound to provide products that are suitable for your needs, but which may not be the very best for you.

That doesn’t mean somebody who upholds the suitability standard isn’t going to look out for you – but it does mean that the rules for those advisors are less stringent.

Registered investment advisors, investment advisor representatives and certified financial planners all carry fiduciary-level responsibility. You can easily spot these titles on business cards, websites and email signatures, if you look after the person’s name.

Chartered retirement planning counselor and accredited investment fiduciary are other designations that indicate a fiduciary responsibility. Keep in mind, your financial advisor will likely carry a Series 65 license or a Series 7.

As for what you might discuss with a financial advisor, it can run the gamut. In Genkin’s case, she says, “I work with students to help them create realistic debt repayment plans, self-employed individuals who need help figuring out what they can do to save for retirement and new families who have limited resources and would like to save for a down payment on a home and start a college savings plan for their baby at the same time.”

She also points out that you may not need many hours, at first, with a financial advisor. If you’re just starting this journey, you probably have fewer assets, and you just need that initial guidance.

By the time you need more help to manage your assets, well, you’ll presumably have more money, and paying for more financial advice won’t be as challenging.

Stick Up for Yourself

To avoid getting scammed, make sure to get references and check out everything you can find on the financial advisor online first. And keep in mind, everyone pays something when they hire a financial advisor – and not everyone is out to get you.

But after you find a financial advisor, you do want to make sure you’re in sync. You’ll want to get a sense of whether your advisor has a financial philosophy that lines up with yours.

And the most important question of all? “Ask how can they help you reach your goals,” says Brett Anderson, a certified financial planner and president of St. Croix Advisors, an investment advisory firm in Woodbury, Minnesota.

And if you’re anxious that you don’t make enough money for a financial advisor to work with you, just tell the advisor upfront what you earn and your overall financial health, Anderson says.

“Established advisors will want to have a dialogue even before they schedule an initial meeting with you,” he says. “Be honest. Just lay it all out. You’ll save everyone time and most importantly, you’ll find the right advisor for you.”

And the more time you save in looking for a financial advisor, the faster you can get started making your money work for you.

When Should You Hire a Financial Advisor?

With all of the information available to you in books, print media, and the multitude of websites dedicated to personal finance, do you really need a financial advisor?

Well, how much free time do you have right now? In addition, ask yourself these questions:

• Do you have a fair knowledge of investments?
• Do you enjoy reading about wealth management and financial topics and researching specific assets?
• Do you have expertise in financial instruments? Do you have the time to monitor, evaluate them, and make periodic changes to your portfolio?

Doing your own research is a possibility, but to do it right you’ll need to spend a lot of time keeping up to date on all the changes in investing and insurance regulations, among other changes. There are changes in tax laws or other legislation that could affect your financial affairs.

Changes in mutual fund options at your brokerage firm can also have a huge impact on your financial situation: Perhaps one of your funds closes and you need to decide where to put the money. You will also need to stay abreast of popular financial products and the introduction of new products.

How do You Find a Financial Planner You Can Trust?

Here are seven steps to help you find the best financial advisor for your needs.

Understand the Types of Financial Advisors

Some financial advisors offer financial planning services but not investment management services. Others manage investments but provide little financial planning. Some have ​expertise in retirement income planning focused on those near or in retirement. Others focus on wealth accumulation for folks who won’t be retiring for another 10 or 20 years.

To find the best financial advisor for your situation, you need to know what type of financial advice you need and what services a potential advisor provides.

Here’s a brief summary of three main types of service offerings:

• Financial planning focuses on all aspects of your financial life such as how much to save and what type of insurance you need. It is not just about your investments.
• Investment advisory services are focused on such investment management decisions as what investments to own in which accounts. The best investments are chosen only as part of an ongoing financial planning process.
• Retirement income planning is focused on how you coordinate all the pieces such as Social Security, taxes, investments, ​pensions, retirement date, and more, so they all align toward the goal of delivering a retirement paycheck for life.

Seek Financial Advisors With Reputable Credentials

All credentials are not alike. Some organizations create easy-to-obtain credentials for a fee so that salespeople can acquire a credential and appear to be an expert.

To find advisors or financial planners with reputable credentials, look for someone who has their CFP (Certified Financial Planner) or PFS (Personal Financial Specialist) designation, or an investment advisor who has their CFA (Chartered Financial Analyst) certificate. Importantly, CFP professionals are bound by the fiduciary standard of care, meaning that they are required to always place their clients’ interests above their own.

Credentials are obtained by passing an examination that demonstrates proficiency in the subject matter. To maintain the designation, an advisor must adhere to an ethics policy and meet continuing education requirements.

You can also see whether a potential advisor is a member of the National Association of Personal Financial Advisors, a membership group of fee-only advisors that requires continuing education that goes beyond the required credentials.1

Know How Financial Advisors Are Compensated

There are numerous ways financial advisors charge for their services, but the most objective and unbiased financial advisors are fee-only. To hire the best financial advisor you’ll need to know all the ways a potential financial advisor may be compensated, such as charging an asset-based fee, an hourly fee, or participating in commissions.

Understand the difference between a fee-only advisor and a non-fee-only advisor. A non-fee-only advisor may be able to receive other types of kickbacks or incentives from their company based on meeting sales goals or objectives.

There are no right or wrong ways for an advisor to be compensated. What works best for you will depend on your financial needs.

For example, if you are buying an investment that you plan on holding on to for a long time—and for which you will not need ongoing advice—paying a commission may be the most cost-effective option. However, if you want someone readily available to update your financial plan and address ongoing questions, a commission-based fee structure is not the optimal choice.2

Use Search Engines to Screen for Criteria

Online searches are a great way to narrow down the advisors in your ZIP code who have the right credentials and appropriate billing structure to meet your needs. You can use financial advisor search engines to input specific criteria about the type of advisor you are looking for.

However, many firms work with clients remotely. That allows you to pick an advisor based on expertise rather than location if you don’t need to meet face-to-face. Not everyone is comfortable working remotely, so you have to decide how important it is to meet someone in person rather than virtually.

Ask These Questions Before Hiring

The right questions can help you weed out financial advisors with whom you don’t communicate well. How long have they been practicing? How are they compensated? Can they walk you through different retirement projections?

Using specific interview questions can help you determine how the financial advisor communicates, as well as their area of expertise and their ideal client. The key is making sure you understand the answers—and if you don’t, feeling comfortable enough to ask follow-up questions.

It’s always advisable to ask someone for references. However, due to privacy regulations, many advisors cannot hand out the names of other clients. Regulations prohibit financial advisors from using testimonials unless certain provisions have been met, including disclosing whether the person giving the testimonial or endorsement is a client and whether the endorser is compensated.

This non-testimonial rule was changed in December 2020 and will soon take effect.3

Verify Credentials, Check for Complaints

To be sure that someone is legitimate and has a good service record before you hire them, verify an advisor’s credentials and complaint history by checking their records with the Financial Industry Regulatory Authority (FINRA), the Securities and Exchange Commission (SEC), the CFP Board, or other membership organizations with which the advisor is associated.

Form ADV Part 2, a brochure that advisors are required to submit to the SEC, lists conflicts of interest the advisor might have. You may also want to check out ADV Part 1, which spells out an advisory firm’s ownership structure, and Form CRS, which discloses information about a firm or advisor’s business operations and compensation. You can find the first two on the Investment Adviser Public Disclosure website and ask an advisor for Form CRS.

If the advisor you’re researching is regulated by FINRA, you can use the BrokerCheck feature on FINRA’s website to see whether there are any complaints on file. If the SEC regulates the advisor, then you can use the SEC Investment Advisor search feature on the SEC’s website to check out both the advisor and the firm they work for.

Just because an advisor has a complaint, it doesn’t mean you should automatically rule them out. Formal customer complaints stay on a financial advisor’s record for a long time. The longer someone has been in business, the more likely it is that they will have at least one complaint on their record. However, if someone has multiple complaints, you may want to look for another advisor.

Learn How to Spot Fraud Risks

Fraud is more easily perpetrated when someone has custody of your assets. Most reputable financial advisors will use what is called a “third-party custodian” to hold your assets. That means your accounts would be opened at a large, well-known firm such as Charles Schwab or Fidelity. The advisor is able to place trades and offer service on the account, but it is the custodian that reports transactions to you, verifies signatures, and does much more.

Be cautious of advisors or firms who have custody of your money or own another related firm that serves as the custodian. That is how Bernie Madoff was able to pull off his Ponzi scheme.

Take extra precautions when talking to advisors or firms that co-own other investments or other firms that they are recommending to you. The ownership structure and any potential conflicts of interest should be listed in form ADV Part 1, the firm’s disclosure document.

Is it Worth The Money to Hire a Financial Advisor?

Financial advisors can be great when you are confused, emotional, or simply ignorant of various wealth-management topics. Add in the fact that a majority of people can’t see far enough into the future to imagine their retirement, much less plan for it, professional advice can be very handy. A qualified advisor will ask you a lot of questions—some of them uncomfortable—in order to get the full picture of where you want to take your life.

Once all of the details are in hand, they can put together a plan and offer you advice on investments, retirement planning, estate planning, tax liability, and your kids’ college education. The breadth of the advisor’s knowledge can make a lot of your difficult decisions easier.

Some financial planners go further, actively helping you to buy insurance products and to invest in financial products, like mutual funds or certificate of deposits (CDs). While not all financial advisors can actually trade actual securities, such as stocks or bonds, they can act as your liaison with a broker or money manager who does. They can also work with a trust and estate planning lawyer or an accountant on your behalf.

How Much Does it Cost to Meet a Financial Planner?

When it comes to financial advisor cost, most firms charge fees based on a percentage of assets under management (AUM) for ongoing portfolio management. According to a study by RIA in a Box, the average financial advisor cost is 0.95% of AUM, which for a $1 million account would amount to roughly $9,500 per year. Fees are often assessed quarterly, though, so depending on how your investments are faring, your advisory fees may be more or less.

Asset-based fees may decrease as the size of the account increases, ensuring that high-net-worth individuals are still paying a fair rate. However, this also means that fees will be higher for those with lower account values. The average AUM fee for a $50,000 account is 1.18%, or $590 a year, according to a 2017 AdvisoryHQ study.

Fixed fees and hourly fees typically apply to financial planning or consulting services, as well as special projects. Fixed fees typically range from $1,000 to $3,000. Hourly fees can be anywhere from $100 to $400 an hour, depending on the advisor and the complexity of the project. The table below breaks down three average financial advisor fees:

Fee Type	Typical Cost
Percentage of Assets Under  Management	1% – 2% per year
Fixed Fees	$1,000 – $3,000
Hourly Fees	$100 – $400 per hour

How Much Money Should You Have to Hire a Financial Advisor?

Although you may find some advisors willing to take you on with any amount of assets, you may find many advisors will only advise high-net-worth clients and impose investment minimums of $100,000 on the low end ranging up to $1 or $2 million.

Fee-based financial advisors average $150 to $300 per hour. Commission-based advisers will receive a percentage of the total number of transactions that you make. Financial advisers that offer managed portfolio services may charge anywhere from 0.5 percent to 2 percent of the assets under management.

15 Steps to Follow When Hiring a Financial Advisor

Sometimes the label “financial advisor” gets a bad reputation for being expensive and not having your best interests in mind. There have been some nightmares about the industry, but that doesn’t mean all financial advisors are out to profit off you and not genuine help. 

Although you can teach yourself personal finances and the basic investing strategies, you still might want to gain expert help with everything. 

So if you are considering hiring a financial advisor or currently have one, there are 15 important questions you want to ask to make a better informed decision.

1. Are you a fiduciary? 

You might assume that all financial advisors will have your best interests in mind. And you’d also like to assume that their recommendations and choices are based on your specific financial goals.

However, many can (and will) push products on you that are not in your best interests because they collect nice fees or kick-backs. Instead, you want a financial advisor who is a fiduciary. 

When this person is a fiduciary, it means they work in the best interest of their clients and make decisions based on what will create the most value as well.

Most financial advisors are required to follow fiduciary standards, but you have to ask them and do the research to ensure they are. 

This is the number one question you should ask right from the start! 

2. What credentials do you have currently? 

If you have ever evaluated people who work in financial services, you’ve probably seen a bunch of fancy acronyms by their names. All of those mean different things and it means the financial advisor you are evaluating is certified in something specific. 

But you want to ask about their credentials and learn what qualifies them to provide advice and manage assets for you.

The Financial Industry Regulatory Authority’s professional designations database has all the info you need about all the various titles, qualifications and more.

3. How are you paid for your services?

Financial advisors can charge for their services in different ways, but it’s important you ask and understand any fees involved. 

Your goal is to keep as much of your money as possible and not be giving up tons of money that should be going towards your investments instead. 

Fee structures with advisors include flat fees, hourly rates, fee-only, etc. Ultimately, you want a fee-only financial advisor, where they won’t be getting commissions based on what they sell to you to invest. 

4. Do you get paid beyond your clients?

Make sure to also ask another question about how they are paid to see how they respond. You want to potentially ask if they get paid beyond their current clients. 

Besides getting a fee for the services they provide, they could be fee-based where they earn extra on the assets they include in your investment portfolio or for selling additional products for a commission.

Asking this and understanding their response, will help you determine if they are focused on your needs first, or just an extra commission check. 

5. What are all the financial services you offer?

There are various financial services that an advisor can provide or may be more specialized in currently.

It’s important that you ask about all the options you have and what the advisor and their team focus in. You’ll want to know this, especially for your own financial goals and ensuring you are hiring the right person for your specific needs. 

Potential financial services include investment portfolio management, financial planning, tax planning, debt management, life insurance, and more. 

6. What’s your investment philosophy? 

You might be completely new to investing and are not sure about your own philosophy exactly. But you might have particular investing goals in mind. 

When you are first chatting with a financial advisor, make sure to ask them about their own investment philosophy. 

Ideally, you want to hear how they view long-term investing, the kind of investments they choose for clients, and that they invest based on your personal goals.

These are good indicators of what you can expect of their investing style and you want it to align with yours for there to be good synergy. 

7. How often will you communicate with me?

When your money and investments are on the line, communication is extremely critical.

But whether the markets are in a correction or an amazing bull market is in flight, your financial advisor should be communicating with you on a regular basis.

Ask them upfront about how often they will regularly communicate with you. 

Now, you don’t necessarily need to hear from them every day about your portfolio or specific financial services. But you should be aware of some consistency whether that is monthly, quarterly, or some other cadence. 

8. How often will we need to meet in person?

Part of working with a financial advisor will be meeting in person to go over your finances and investments. Many will have a particular schedule in place like quarterly or semi-annually. 

You’ll want to ask about how they meet and how open they are if you request additional meetings. The goal is to find a balance that works for you.

You don’t need to meet too often, but you also don’t want to be left completely in the dark until the end of the year either. 

9. What are the minimums of assets you require?

Depending on the financial advisor and if they work for a firm or not, they may require large minimums for you to get started with them.

Ensure you ask this question fairly early, to understand what type of money you may need to start with this person. 

Naturally, you’ll want to work with someone that fits your current assets you have. And unfortunately, there may be some finance advisors that meet all your criteria but a minimum entry might be a current barrier. 

10. How do you measure financial performance and investments?

A great question to ask a financial advisor is how they measure your financial success — things like your goals, investment performance, client satisfaction, etc. 

While they should be measuring your return on investment with them, their results should be measured beyond just financial gains too. They should have multiple points of measurement that evaluate your financial health while working with them. 

Listen to how they approach this and that they have a plan that shows how they are monitoring your results and overall success. 

11. Why did another client hire you? Why did a client leave you?

Think of your potential financial advisor as someone you are hiring at a job. 

Besides understanding their background, you want to see if they will tell you about past and present experiences. Why did a recent client hire them and why might a client have left?

No one is perfect and sometimes business relationships do not work out as goals are not aligned, but you want to look for honesty and transparent stories of their current work portfolio. 

Look for any redflags or odd patterns to past client relationships that might be a sign in a positive or negative direction. 

12. How do you approach taxes and fees with my investments? 

When it comes to your money and investing, paying the minimum amount in fees and taxes is important. So a question you should ask your potential financial advisor (or current one) is how they approach taxes and fees on your investments. 

Not only can and should a financial advisor be able to help you understand your taxes and fees, but take an approach that saves you money.

Your potential advisor should be able to provide recommendations, have a strategy, and be upfront about your potential results after any fees or taxes. 

13. Do you have a team that helps you manage my finances?

While many financial advisors will handle the majority of work and recommendations, most will also have a team to help. After all, there is a lot of information and steps to optimizing everyone’s finances!

But it’s important to ask about the team your financial advisor may be utilizing for your finances. 

What are some of their backgrounds, specialities, and experiences? It may seem tedious or that you are asking too many questions — but this is your money! Doing your due diligence can make all the difference in your net worth. 

14. Are you specialized for certain clientele? 

Most financial advisors will specialize in various areas of finances like financial planning, investing, debt management, etc. However, some take a more specialized approach or have a target demographic. 

Naturally, you may know some of that information prior to meeting but it’s still important to ask. This will ensure you align yourself with the right advisor pending your financial needs. 

For example, do they focus on retirement age groups only? Are they more focused for business owners? 

15. What do you enjoy about your job? What do you dislike?

Another great question to ask is more personal towards their financial work. Ask what they love about their current work for clients and what they dislike too. 

Besides learning more about their personality, you want to select someone with a passion and who genuinely cares. No job is exactly perfectly, but you want someone who is doing this for more than just a paycheck. 

6 Signs That Will Convince You to Hire a Financial Advisor

If you can’t decide whether to hire a financial adviser but keep thinking you might need to, here are some signs you should:

1. You’re a high earner in a top tax bracket

Financial adviser Henry Hoang of Bright Wealth advisers says that, if you are consistently maxing out your retirement savings but still finding yourself in a top tax bracket, a financial adviser could be worth their weight in gold.

“This is a sign that it will be worthwhile to explore strategies such as backdoor Roth or Mega backdoor Roth strategies,” he says.

High earners are clients who typically have the capacity to take advantage of savings strategies that result in lower taxes paid before or during retirement. But when high earners don’t have a financial adviser in their corner, there’s a good chance they’ll keep paying more in taxes than they should.

2. You know you need to take action but keep putting it off

Financial adviser Daniel Kopp of Wise Stewardship Financial Planning says that analysis paralysis is a real problem in most people’s finances. This problem takes shape any time you’re unable to move forward with decisions like investing, analyzing your student loans, or determining whether you have the right insurance coverage.

“Analysis paralysis can occur with too many investment decisions, such as making investment decisions or rebalancing portfolios after market corrections or long runs,” he says. “This inaction can easily lead to losses in a portfolio or missed chances at larger profits.”

A financial adviser can provide “a rational, yet human perspective” to help you get out of your own way and the behavioral biases we all have. Without one, however, you may be stuck mulling over your next steps for so long that you fail to take action at all.

3. You’re not on the same page with your spouse when it comes to your finances

Hoang says that you may also need a financial adviser if your finances are creating constant tension in your household, and especially if you and your spouse have drastically different ideas about money.

“Working with a financial planner who can help you two speak openly in a productive manner can help you gain clarity on each of your top values and shared values,” he says. “This can help couples work better as a team.”

Without an unbiased third party to help couples work their money issues out, on the other hand, they’re often stuck arguing over the same issues for their entire lives.

4. You owe back taxes and can’t figure out why

Financial adviser Sean Mullaney of Mullaney Financial says that hiring a tax-focused financial planner is crucial if you receive a notice from the IRS or a state agency that you owe back taxes.

In addition to helping you create a long-term financial plan, a good financial planner can help you figure out the underlying issue and meet the deadline for responding to the notice.

“If the IRS is correct and something went wrong in your tax planning and tax return filing, a good financial planner can get you back on track so that you avoid repeating the mistake in the future,” says Mullaney. “If the IRS is wrong, a good financial planner can help you file an appropriate response to obtain a favorable resolution with the IRS.”

5. You don’t know if you’re on track for retirement

Financial adviser Brandon Renfro says that, if you don’t know if you’re on track for retirement, you definitely need to have a general idea. And if you can’t figure out where to start your journey, hiring a financial planner can help.

Retirement is a long-term goal that requires long-term planning, and you won’t generally reach your retirement number by accident unless you’re investing regularly already and really, really lucky.

“There are a lot of inherent uncertainties in that, but you still need a well-constructed plan to aim for,” says Renfro. “A financial planner can help you define your target and get you in the best path to achieving it.”

6. You don’t have the time (or the desire) to learn about personal finance

If your eyes gloss over every time you read about personal finance, you probably need a financial adviser, adds Renfro. The same is true if you’re so busy in your personal or professional life that you just can’t dedicate the time required to manage your finances and build toward long-term financial goals without outside help.

“A lot of personal finance isn’t terribly difficult, but you still need to read to learn it,” says Renfro.

If you don’t have the will or the time, a financial adviser can provide a useful service you desperately need.

How Much Money do I Need to Hire a Wealth Manager?

In short: A lot. Wealth management services often require steep account minimums. For example, Fidelity’s “private wealth management service,” where you have an entire team of financial professionals working on your behalf, requires at least $2 million invested through Fidelity Wealth Services and $10 million or more in total investable assets.

Fidelity also offers a simpler “wealth management” service, where you work with an individual advisor and requires a $250,000 account minimum.

Wealth management is the most advanced form of investment advisor services. A wealth advisor typically creates a specially tailored investment strategy and plan for their clients to help them manage their assets.

Wealth managers generally aim their services at the highly affluent and may have expertise in the types of financial questions that affect the ultrawealthy, such as how to avoid the estate tax. They often coordinate services among different experts, such as working with a lawyer or an accountant on your behalf.

One Time Financial Advisor

Hiring a financial advisor can make sense when you need or want professional guidance with managing money or building wealth. While advisors often prefer to build ongoing relationships with clients, there are finance professionals who offer one-time consultations. Meeting with a one-time financial advisor means knowing how to make the most of your time together.

Financial advisors and financial planners both offer financial advice to their clients. Generally, financial advisors work with clients over time, helping to guide them through different life stages. For example, your advisor may help you create a financial plan in your 20s or 30s, then help you adapt and fine-tune that plan as you move into your 40s and 50s.

A one-time financial advisor meets with a client just one time versus scheduling regular check-ins. You can use the time to discuss your financial situation. In exchange, the advisor charges a fee. But once the consultation ends, you’re not obligated to meet with the expert again.

Question You Should Ask Yourself Before Hiring a Financial Advisor

What type of help are you looking for?

I just need to get started investing for my financial goals: 

A robo-advisor may be the best fit if you’re just starting out or only need investment management. For a low fee, these computer-based services choose and manage an investment portfolio for you. Some also offer access to financial advisors if you have questions about your investments or your goals. Robo-advisors often have low or no account minimums, so it’s easy to get started.

I want personalized financial advice, but don’t need to meet my advisor in person. 

There are a crop of services offering online financial planning for less than you’d pay a traditional in-personal financial advisor or financial consultant. These companies provide complete investment management and holistic financial planning; the major difference is that you’ll meet your advisor virtually — by phone or video chat — rather than in a local office.

Most services pair you with a dedicated advisor or certified financial planner; some less-expensive options offer access to a team of advisors.

I want a local advisor or a wider array of financial advice:

On the other hand, if you want in-person financial planning or have a more complex situation, you may decide a traditional local financial advisor is right for you.

Do I Need a Financial Advisor Quiz

If you’re a diligent saver and competent investor, you may figure there’s little reason to purchase an adviser’s services. If you don’t know something, such as whether converting to a Roth IRA makes sense or not, you’re comfortable researching the answer on your own.

Before you conclude you’re equipped to go it alone, ask yourself these questions:

1. Do I need help with financial planning — or am I looking for stock tips?

Say you’re weighing whether to buy a new home, unsure how much to spend on it or what kind of mortgage to get. Or you’re saddled with student loans, trying to save for your kids’ tuition and looking for tax-saving strategies.

Advisers are well-suited to address those concerns. It’s all part of what they call “holistic financial planning.”

“You don’t need a financial planner to tell you what the next Tesla will be or if Apple stock will go up over the next five years,” said Harold Pollack, co-author of “The Index Card: Why Personal Finance Doesn’t Have to be Complicated.” “You’ll be disappointed if you expect that.”

2. Am I ready to follow this person’s advice or do I just want to hear what I want to hear?

Some investors hire an adviser to get a stamp of approval for what they’re already doing. They want to be able to say, “Look, this sharp adviser didn’t tell me anything I didn’t already know.”

But if you’re genuinely eager to learn and you’re receptive to fresh ideas, you’re more likely to enjoy a beneficial working relationship with an adviser.

“Be ready to hear from a financial planner what may not in that moment be stoking your ego,” said Pollack, a professor at the University of Chicago’s Crown Family School of Social Work. “What the planner says might be unpalatable in the moment. And that can be great” because it offers insight you might otherwise lack.

3. Do I have the discipline to stay the course?

For many advisers, a big part of their job is hand-holding clients during crises. For example, urging investors to “stick with the plan” and avoid panic selling during a stock-market downturn can prove invaluable.

“Money is very emotional,” said Rishi Bharathan, chief executive of Fairfax, Va.-based WiserAdvisor, an online firm that matches consumers with advisers. “Most people don’t recognize that,” so unless they’re highly disciplined and capable of controlling their emotions, they may want to pay a financial planner to provide a voice of reason.

4. Do I have a good understanding of risk?

Soon after hiring an adviser, you might fill out a questionnaire to assess your risk tolerance. If you’re already well-aware of your attitude about risk — and your ability to weather large swings in your net worth without flinching — then an adviser may not add much in the way of portfolio construction.

On the other hand, some investors don’t know their comfort level with risk until it’s too late. An adviser can position your portfolio to preserve your sanity if you might otherwise feel distraught when sustaining steep short-term losses. “Most people think they understand risk, and that can be dangerous,” Bharathan said.

5. To what extent would access to advisers’ knowledge and technology (to assess and manage investments) improve my financial life vs. doing it myself?

You can go without an adviser if you possess sufficient knowledge of financial markets, investments and other aspects of money management from budgeting to estate planning to retirement planning. But the real issue is how your knowledge stacks up against an adviser’s knowledge.

“Financial advisers have access to solutions and technology that the general public does not,” said Angie Herbers, chief executive of Herbers & Co., an independent management consultancy for advisers in Austin, Texas.

6. Who do I know and trust — experts and friends — who are willing to help me gain a deeper understanding of my financial life? 

Even do-it-yourselfers benefit from a support network. “The truly wealthy person will tell you that wealth is who you surround yourself with,” Herbers said. “If you choose to do it yourself, you are simply saying, ‘I’m smarter than an expert,’ and that better-than mentality is not how the wealthy build and sustain their money.”

How to Hire a Financial Advisor in India

There are two ways of hiring a Financial Planner for yourself:

1. Hiring a CFP

In case you want to hire a CFP (which is recommended) you can get a list of CFP’s in India at FPSB website link, Click here.  You can find out CFP based on

• Name/Company
• City/State
• Nature of Employment

2. Hiring a non-CFP

You can also Hire a non-CFP but you have to be very careful while doing that. Before CFP certification came to India, we had excellent planners in the Industry who understood the financial planning process subconsciously and still practice that but without having the CFP certification. These people can be from various backgrounds but can have sound financial planning knowledge. They are rare species. Some of them who I can think of are people like P V Subramanyam.

The biggest problem one faces in hiring a Financial planner is the “Trust”. So you need to have some level of trust with Financial planner and for that you need to interact with him, spend time with him, get references from family and friends and once you are satisfied you can then hire him/her. A financial planner at the end is someone who is also interested in educating you and not just making money from you.

Just imagine a doctor who gives you medicine, but does not tell you the preventive measures to take, so that you are not ill next time. Would you like to visit him again and again?  He should be interested in educating you up to a level where you can take informed decisions yourself. Only then you can call him a good doctor, the same applies to a financial planner.

How to Become a Financial Advisor

STEP 1: Earn a Bachelor’s Degree

Good news! If you’re currently enrolled in college and working toward your bachelor’s degree, you’re already on the path toward becoming a financial advisor. Most practicing financial advisors majored in some type of business or finance program. If you’re considering a career in financial advice, it might also be a good idea to find and interview someone who is currently working in the field.

Tell them you’d like to become a financial advisor, and ask them specific questions about what an average day looks like, what factors influence their compensation, and what they like and dislike about their career. This will give you an accurate picture of what to expect in the career for which you’re preparing.

STEP 2: Complete an Internship

While still in school, it’s a good idea to pursue an internship with a financial advice firm or sole practitioner. Internships will help you get a first-person look at the career and understand what it means to be a financial advisor on a day-to-day basis. Internships also represent an opportunity to network with existing financial advisors and potentially find a mentor. Some of the relationships you form as an intern will follow you throughout your career.

Finally, an internship looks good on your resume. Most employers prefer to hire people with experience. Of course, as a recent college graduate, you won’t have much, if any, experience. An internship provides a priceless opportunity to gain experience and demonstrate your active interest in becoming a financial advisor.

STEP 3: Find a Job

Once you’ve earned your degree and gotten some experience as an intern, it’s time to start job hunting. There is no shortage of resources available to help you write an effective resume. Here’s a few tips for writing a resume that will get noticed:

• Go beyond your education and work experience. Talk about what makes you a great employee, and the skills you have that make you a great fit for the position.
• Don’t waste words. Short and impactful statements on your resume make it easier for the employer to identify and remember the points you’re trying to make.
• Put the important stuff up front. It’s ok to work from a template, but you’re trying to present yourself as a unique individual to potential employers. Feel free to take liberties with the template to make sure it effectively sells you as a potential employee.

STEP 4: Get Certified

The field of financial advising is competitive. Many advisors pursue certifications or licenses to help them develop a specialty or differentiate themselves from their competition. Once you’ve logged some experience in the field, you will get a better idea of the type of work you enjoy as a financial advisor.

This experience will help you decide which certification(s) are a good fit for the career you want to build. Some common certifications and licenses that financial advisors pursue are:

• CERTIFIED FINANCIAL PLANNER™
• Chartered Financial Analyst®
• Securities licenses
• Insurance licenses

STEP 5: Pursue Additional Education

A thirst for knowledge will serve you well in any career. Financial advice professionals will often go back to school to pursue a graduate degree, or even a doctorate. Your job relies on your ability to provide valuable financial advice to clients. The pursuit of further education is a tangible way to demonstrate your commitment to providing excellent service as you continue in your career.

Demand for financial advisors is high and will continue to grow as our society becomes more financially literate and recognizes the importance of making sound financial decisions. Now that you understand how to become a financial advisor, you are prepared to chart your own career path and get started providing valuable advice.

Do I Need a Financial Advisor For my 401k?

You do not necessarily need a financial advisor for 401(k) if you know and understand which mutual funds to choose for your 401(k) and you have some investment experience.  In this case you may manage your own 401(k) through consultations with your 401k fund manager. This is one of the biggest 401(k) advantages and helps to make 401(k)s a (reasonably) hassle free passive investment plan.

But it is not a bad idea to hire a financial advisor to assist you when determining your 401k fund allocation (mutual fund mix).  Factors such as your age, risk tolerance, earning potential, and lifestyle goals should be considered thoroughly.  Working with a financial advisor may help maximize the long term/average returns on your 401(k) by reaching a “best” decision based upon all of these factors.

Many investors who are inexperienced, very risk averse, or generally nervous about investing may make poor investment allocations, typically by being too conservative and “loss averse”.   If average expected returns on 401(k) are between 1% (cash/bonds) and 8% (diversified equities), then a financial advisor can help maximize the returns and minimize risks within the employee’s risk tolerances. 

The financial advisor can also help the employee avoid making poor decisions during periods of market volatility (short term loss) by offering an experienced, educated bit of advice.

Should I Use a Financial Advisor or do it Myself?

To decide which is right for you, ask yourself these five questions:

1-How complicated are your finances? Are you young, single and simply looking for straightforward investment advice for your brokerage or 401K? Or are you dealing with more complex matters such as inherited stock, margin trading and retirement distribution strategies? Do you expect your situation to get more complicated with the birth of a child, divorce or illness? The more complex, the more need for a professional investment advisor.

2-How much money do you have to invest? With more wealth comes more investment options and complexity, and a greater need for an investment advisor. If you have a small portfolio, you won’t want to spread it too thin across multiple assets, and probably won’t want to allocate a % to fees; you may be a prime candidate for index fund investing, on your own or with the help of an hourly planner.

3-Do you need comprehensive financial planning?  Need someone you can call from the dealership to talk you out of buying the Range Rover instead of the agreed upon Hyundai? Want advice on what type of life insurance you need, or if you should deposit your bonus into your 529 or retirement? What about if the market crashes like 2007? Can you fight the urge to panic and sell everything if your portfolio lost half it’s value?

This is when a professional is a huge asset. If you need a financial partner who will provide comprehensive financial planning in all areas and at all times, then the fee is absolutely worth it. If you all you want is to invest a little cash in the market and see what happens, then go with hourly or try it yourself.

4-What are your expectations? If an investment advisor tells you they have the secret to beating the market, you will probably be disappointed. The efficient market hypothesis (EMH) is an investment theory that states it is impossible to “beat the market” because stock market efficiency causes existing share prices to always incorporate and reflect all relevant information.

Few investors, professional or amateur, can consistently outperform the stock market averages. That being said, a good advisor will more than likely get better returns over time than an amateur. Just don’t expect your money to double overnight.

5-Whats your level of sophistication and interest? You have to have a basic understanding of finances and the market to be your own money manager (or be willing to learn). It’s also important that you enjoy it, because you will have to spend a lot of time on your portfolio. So be realistic here. FINRA (Financial Industry Regulatory Authority) has an abundance of helpful financial tools and quizzes.

If you want to manage your own finances, browse this site. If all the sudden you realize four hours have blown by and you’re still knee deep in their ‘fund analyzer’, then investing may be for you! But if just reading the term ‘fund analyzer’ makes you want to scratch your eyeballs out, please visit NAPFA or CFP to find a fee-only financial planner near you.

Can I Trust a Financial Planner?

Today, the question of a financial advisor’s trustworthiness has taken on heightened importance. The fact that prominent New York investment advisor Bernard Madoff fleeced so many sophisticated and highly accomplished people still haunts some. Plus, there are so many ways today for investors to make—and lose—money. Wall Street seems to invent new financial products on an almost daily basis, each more alluring (and yet potentially confusing) than the next.

That’s why the public needs people to counsel them. But these investments also carry heavy risks. Individual investors naturally rely on the expertise and involvement of financial advisors.

Further complicating the picture, not every investor has the same needs at the same time. A young person might eschew the highly conservative notion of capital preservation because they will be working and earning money for decades to come.

This individual might be much more willing to go into speculative financial instruments than, say, someone nearing retirement age who has doggedly amassed a healthy nest egg and primarily wants to preserve it without unnecessary aggravation or risk.

To raise your personal comfort level with an investment advisor, experts suggest checking an advisor’s background with the Financial Industry Regulatory Authority’s (FINRA) website. If an advisor has a history of non-compliance with regulations such as The Employee Retirement Income Security Act (ERISA), it would be hard to trust that the advisor will make your finances their priority.  

What is The Difference Between a Financial Planner And a Financial Advisor?

The financial planner is one type of financial advisor, who helps companies and individuals create a program to meet long-term financial goals.

The planner might have a specialty in investments, taxes, retirement, and/or estate planning. Further, the financial planner may hold various licenses or designations, such as Certified Financial Planner (CFP), Chartered Financial Analyst (CFA), Chartered Financial Consultant (ChFC), or Certified Investment Management Analyst (CIMA), among others.

To obtain each of these licensures, the financial planner must complete a different set of education, examination, and work history requirements.

Financial Advisor

This is a broad term for a professional who helps manage your money. You pay the advisor, and in exchange, they help with any number of money-related tasks. A financial advisor (sometimes spelled ‘adviser’) might help manage investments, broker the sale and purchase of stocks and funds, or create a comprehensive estate and tax plan.

If the advisor is working with the public, they must hold a FINRA Series 65 license.2 In addition to that license, there are many other financial advisor credentials the advisor might hold, depending upon the services that are provided.

“Financial advisor” as a general term includes subsets of the financial advisor group, such as stockbrokers, insurance agents, money managers, estate planners, bankers, and more.

Think of the comparison between a financial advisor versus a financial planner like a funnel with the financial advisor on top. Continuing with this analogy of the funnel and going further down, a financial planner is a type of financial advisor.

Key Differences

While these two terms often overlap, a financial planner can be viewed as a type of financial advisor. In particular, a financial planner is a professional who helps individuals or organizations achieve their long-term financial goals.

These can include planning for retirement, a child’s college education, the down payment for a home, and so on. A financial planner relies on strategic portfolio allocation for investments with relatively long time horizons, ensuring that expected returns and risk tolerances are in balance.

A financial advisor, on the other hand, is a broader term for somebody who may be involved in this type of planning, but also involved in other facets of money management or financial products. They may, for instance, provide life insurance, real estate, or accounting services, may help place short-term trades, and/or provide banking accounts.

Can a Financial Advisor Steal Your Money?

Financial advisors are highly trusted professionals who help make decisions that impact your economic future. When that trust is broken through a bad or negligent act, the investor suffers and the financial advisor must be held accountable.

All financial advisors are held to a standard of care when dealing with investors. Registered financial advisors have a higher fiduciary duty to their clients under the Investment Advisers Act of 1940.

This is the highest legal standard of care and requires financial advisors to act in the best interest of their clients, make suitable investments, and disclose relevant information to you.

If your financial advisor outright stole money from your account, this is theft. These cases involve an intentional act by your financial advisor, such as transferring money out of your account. However, your financial advisor could also be stealing from you if their actions or failure to act causes you financial loss.  

Losing money through investment is not enough to bring a claim against your financial advisor. Remember, there is no guarantee of return when investing.

Even if your financial advisor made the recommendation, under federal securities law and FINRA regulations, you cannot hold your advisor liable simply because they lost you money. You need a viable cause of action, such as a breach of fiduciary duty, negligence, or malpractice.

Do Financial Advisors Make You Money?

There are three main ways financial advisors make money:

1. Client fees: These are usually charged either on an hourly basis or as a percentage of each client’s assets under management.
2. Commissions: These apply to certain financial transactions, such as the sale of insurance products or the buying and selling of securities.
3. Salaries: Many on-staff advisors earn income in this traditional manner.

Client Fees 

Many financial advisors and firms will earn fees directly from their clients. A management fee (for investment management services) is frequently charged a percentage of the assets they’re managing on your behalf. If a financial advisor is managing $1,000,000 worth of investments for you, and they charge a 1.5% management fee, you’d pay $15,000 on the year. Often, advisors charge these fees on a quarterly basis.

Fee percentages might differ depending on how much you have invested with an advisor, with many firms lowering their percentage for larger account balances.

Some advisors also include performance fees in their fee schedules, allowing them to charge additional fees to clients in exchange for exceeding certain return benchmarks.

An advisor might also charge a flat or hourly fee, usually for financial planning services. For instance, a firm may charge $250 an hour for financial planning, or a flat fee of $1,000 for a specific service.

Commissions

In this type of fee arrangement, a financial advisor makes their money from commissions. Advisors earn these fees when they recommend and sell specific financial products, such as mutual funds or annuities, to a client.

For example, you might invest $5,000 into a mutual fund your advisor recommends. In turn, they receive a 3% commission fee, earning them $150. Similar commission may come their way if they sell an annuity or life insurance policy to a client.

Salaries

Some advisors receive a salary from the investment firm that employs them, rather than earning commissions or charging fees. These advisors may also have opportunities to earn bonuses or incentives for meeting certain milestones, such as onboarding a certain number of new clients each year.

Do Banks Offer Free Financial Advice?

Many banks provide the option to use their financial advisors for your investments. They may even offer incentives such as lower fees or free checking if you have an investment account at the bank.

Note that your bank advisor is not a free financial advisor. Generally, there is a minimum amount that they want you to continue to have invested through them to maintain the services. You may want to work with your bank because you already have a relationship with them. However, it is important to make sure your bank’s investment services are the right fit for you.

How do Financial Planners Get Paid?

Financial advisors are usually paid in one of the following ways:

Commission-Only

If you work with an advisor who only charges a commission, you’ll pay the commission up front as a portion of the money you invest. For example, suppose you have $5,000 to invest. Your advisor recommends a fund that charges a 5% commission. So you pay $250 as the commission and invest the remaining $4,750.

Fee-Only

Fee-only advisors can charge an hourly fee, a flat fee or a retainer fee (more on these later). These advisors are usually self-employed or part of a Registered Investment Advisors (RIA) firm and don’t officially represent any financial services company. The fee you pay is based on their financial advice or ongoing management of your investments. The fee might be arranged in one of the following ways:

Hourly fee:

In this arrangement, you pay for the time your advisor spends with you or working on your case, typically an amount per hour. The fee is separate from your investments and usually works best for people who only need specific advice on a few investing topics.

Flat fee:

If your advisor charges a flat fee, you’ll review a selection of services your advisor offers and choose the ones you need. For example, you might pay a flat fee of $2,000 for a bundle of services that includes an analysis of how much money you’ll need for retirement and a plan to get you there. As with the hourly rate, this fee isn’t tied to your investments.

Retainer fee:

If your advisor charges a retainer fee, you’ll pay a fee up front for an estimated amount of services or time. For example, if your advisor charges a $1,000 retainer fee at $125 an hour, the retainer covers eight hours of your advisor’s time—no matter what services you need. Your advisor will bill you for any additional hours.

But if the service you requested only takes your advisor four hours, you could receive a refund of the remaining $500 retainer amount. The retainer could also be calculated based on a percentage of your investment (such as 1%). Or the percentage might be based on either your income, your net worth, or both.

Commissions and Fees (Fee-Based)

Fee-based advisors charge a combination of fees and commissions. For example, suppose you sit down with a fee-based advisor to invest $5,000 in your Roth IRA. For $200 per hour, your advisor develops a detailed investing plan for you. That plan includes a mutual fund that charges a 3% commission—meaning you’ll pay your advisor $150 and invest the remaining $4,850. For at least eight hours of work, you’ll pay the advisor a combined total of $1,750.

$200 x 8 hours + $150 commission = $1,750 combined total fee

What is The Average AUM For a Financial Advisor?

The average fee for a financial advisor’s services is 1.02% of assets under management (AUM) annually for an account of $1 million. The industry average fee is 0.96% and decreases depending on the size of your account.1 2

However, high-net-worth individuals may pay less since the fee structure works on a sliding scale. “A reasonable fee would be 1% at $1 million down to 0.50% at $10 million and 0.10% thereafter,” says Ryan T. O’Donnell, CFP, wealth manager and founding partner of the O’Donnell Group in Chico, California.

In other words, clients should expect to pay a maximum of $50,000 on a $10 million account. Online advisors have shown that a reasonable fee for money management only is about 0.25% to 0.30% of assets, so if you don’t want advice on anything else, that’s a reasonable fee, O’Donnell says.

What is The Difference Between a Certified Financial Planner and a Fiduciary?

Only CFP’s (Certified Financial Planners) are certified. Furthermore, CFPs have an entire education process to complete. Moreover, rigorous exams and ongoing education requirements are part of the gig. Also, it can take a year or two of education to obtain this designation.

Certainly, it doesn’t happen overnight. Correspondingly, the requirements are not the same throughout the industry. Provided, some titles require less time and energy to obtain.

A fiduciary has a higher standard to meet. It’s an ongoing standard. They have to ensure that your investments are hitting certain targets on a regular basis. It just doesn’t stop after the service is sold.

Also, fiduciaries document everything. For instance, they outline how they work, their processes, and how they get compensated.

There are many different types of financial firms or companies. Some are compensated through commission, while others are hourly or fixed-rate. Most financial advisors are not fiduciaries nor Certified Financial Planners. Don’t be afraid to have meaningful conversations and ask questions. It’s important to understand the differences between all these types of ‘advisors.’

How do I Choose a Financial Planner For Retirement?

There are all kinds of advisors—and people purporting to be advisors—out there. If you’re looking for help building a retirement nest egg, you most likely want a certified financial planner, CFP for short, with expertise in retirement planning.

Other financial advisors who may specialize in retirement planning can be identified by various credentials following their names. Those designations include: Chartered Retirement Plans Specialist (CRPS), Retirement Income Certified Professional (RICP), or Chartered Retirement Planning Counselor (CRPC), to name a few.

To find a financial advisor, get recommendations from people you trust, ask for references, and interview possible candidates. You may prefer to hire a fee-based advisor, such as a fee-only financial planner, instead of one who receives commissions in return for selling or recommending certain financial products.

The biggest headwind that can reduce your retirement savings, aside from not saving enough in the first place, are investment fees. When you interview potential retirement advisors, ask them how they are paid. If they’re paid by fees from you, ask them how much their fees are and whether the investment products they may put you in will have fees ,too.

Fee-only advisors will likely charge you either an hourly rate, a flat annual fee, or a fee based on how much of your money they are managing, often somewhere around 1% per year.

Note, too, that some advisors have account minimums. If you’re just getting started, you may not have a high enough balance to qualify for ongoing advising. On the other hand, many commission-based advisors will take on clients with low balances—just be sure they don’t try to put you into inappropriate or unduly expensive funds. To learn more about comparing fund fees, it’s worth taking some time to read up on expense ratios.

Bear in mind that even seemingly small differences in the fees that funds charge can have a large impact over time. For example, suppose you invest $100,000 in a fund that returns an average of 4% a year. By the end of 20 years, you’d have about $208,000 if your fund charged you 0.25% in annual fees, but just $198,000 if it charged 0.5%—a $10,000 difference.

One good way to find a reputable retirement advisor is to ask friends and neighbors you trust, as well as other professionals you may know, such as a lawyer or accountant. Ideally, you should get more than one name and interview any potential candidates before you make a choice.

How Many Hours a Week do Financial Advisors Work?

Most financial advisors work at least 40 hours per week. They often go to meetings on evenings and weekends to meet with clients.

The U.S. Bureau of Labor Statistics (BLS) provides salary information for personal financial advisors as follows:

• Median Annual Salary: $88,890 ($42.74/hour)
• Top 10% Annual Salary: $208,000 ($100/hour)
• Bottom 10% Annual Salary: $41,590 ($20/hour)

Source: U.S. Bureau of Labor Statistics, 2018

PayScale’s salary information for financial advisors is as follows:

• Median Annual Salary: $58,713 ($28.23/hour)
• Top 10% Annual Salary: $122,333 ($58.81/hour)
• Bottom 10% Annual Salary: $34,824 ($16.74/hour)

Who Are The Best Financial Advisors?

Online financial advisors are more accessible, and often cheaper, than advisors who work face-to-face. And increasingly, they’re offering more than just investment management.

1. Wealthfront

You’ll only need $500 to start investing with Wealthfront. Once you meet the minimum requirement, you’ll get access to an array of investing accounts, fee-free hybrid savings and checking accounts , retirement accounts, portfolio lines of credit, crypto trusts, 529 college savings plans, and more.

At Wealthfront, you can also take advantage of investment strategies and financial planning tools provided by a team of PhDs, and investment accounts include automatic portfolio rebalancing and tax-loss harvesting (tax-loss harvesting is a strategy that saves you money in taxes by replacing failing investments).

2. Betterment

Known as one of the pioneers of the robo-advisor industry, Betterment offers several competitive accounts and wealth-building services. These include automatic rebalancing and tax-loss harvesting, fee-free checking and cash reserve accounts, and ongoing financial advice for clients with at least $100,000.

Personal Capital offers similar services, but it requires each client to have a $100,000 minimum balance to set up an investing account. Betterment offers two primary accounts: Digital and premium. Digital accounts have a $0 minimum requirement, while premium plans require $100,000.

Betterment also offers socially responsible investing portfolios, retirement accounts and tools, and Betterment Advisor Network, a platform that connects clients to independent certified financial planner (CFP) professionals.

3. SoFi

SoFi charges no upfront fees to open and maintain automated investing accounts. While some funds in your portfolio have underlying costs, you’ll only need $1 to start investing. 

Among SoFi’s account offerings are no-fee ETF and stock trading, fractional share investing, automatic portfolio rebalancing, and fee-free hybrid savings and checking accounts. In addition, SoFi members can utilize discounts on car loans, career advancement tools, and free consultations with CFP professionals.  

4. Blooom

Blooom is one of the few online advisors managing 401(k)s and other retirement plans. The investment app also offers ongoing portfolio monitoring and rebalancing, and it provides a free retirement tool that analyzes your workplace plan or IRA. Fees for this investment platform range from $45 to $250 per year.

5. Vanguard Personal Advisor Services

Vanguard Personal Advisor Services offers robo-advice along with professional guidance from financial advisors. Though you’ll need $50,000 to begin, you’ll get access to automated investment management and advisors who will help you with things like tax planning, estate planning, and charitable giving.

Another thing to consider is that Vanguard Personal Advisor Services charges lower fees for higher account balances. For instance, Vanguard charges 0.30% per year for account balances lower than $5 million. For account balances between $5 million and $10 million, the company charges 0.20%. If you’ve got between $10 million and $25 million, you’ll pay a 0.10% annual fee. And you’ll pay 0.05% in annual fees if your account balance is greater than $25 million.

How do Fee Based Financial Planners Work?

A fee-based financial planner gets paid by the client but also via other sources, such as commissions from financial products that clients purchase. This can set up a conflict of interest, as the advisor charges you for advice while steering you toward investment products from which the advisor profits.

Ask if your financial planner is a broker or a dealer, also known as a registered representative. These planners are generally held to a lower legal standard, which simply requires them to sell products that are “suitable” for their clients.

If your advisor is fee-based, search for the brokerage’s Form ADV filing with the U.S. Securities & Exchange Commission. The document includes information that spells out how brokers at the company are compensated. (It’s a good practice to check Form ADV before you hire any financial advisor. In addition to explaining fee structure, it lists past misconduct if there is any.)

How Long Does it Take to Become a Financial Planners?

It can take seven or more years to become a Certified Financial Planner, including time spent earning a bachelor’s degree and gaining the experience necessary to meet certification requirements. Financial Advisors who are not pursuing certification can start seeking work after earning their bachelor’s degree.

Can a Financial Planner Give Tax Advice?

Financial advisors engage in a wide variety of financial areas, including tax return preparation and tax planning for their clients. Many, but not all, financial advisors specialize in tax issues and provide comprehensive tax advice to their clients, including tax problem resolution, tax planning, and return preparation as well as preparing estate, gift, and trust tax returns.

Many financial advisors who do taxes for their clients typically hold relevant certifications, such as certified public accountant (CPA) and certified financial planner (CFP).

Typically, financial advisors work with their clients on specific tax issues, but they can also engage in tax preparation services. Financial advisors sit down with their clients and work with them to maximize their tax returns and cash flow. Financial advisors typically gain insight into each client’s financial goals and unique situations, and only then do they provide advice on tax planning and tax preparation.

Clients who face tax problems typically seek the services of financial advisors who can help them resolve their tax issues or mitigate the tax impact on their balance sheets. Financial advisors often help their clients resolve their tax problems.

Do Billionaires Have Financial Advisors?

According to a 2020 survey conducted by Northern Trust Asset Management, 41% of billionaire family offices don’t have a chief investment officer on staff, which could provide an opportunity for financial advisors.

Financial advisors should understand that billionaires aren’t just millionaires with three additional zeros added to their total assets; they require a more structured organization of professional advisors than even the millionaire class. This carefully selected cadre forms a family office that provides the expertise to manage each of the specialized investments in the billionaire’s portfolio.

The role of managing billions for a client like Warren Buffett, who’s worth $105 billion, and his fellow billionaires could hardly be shouldered by just one advisor with superhero-size financial and legal acumen. Rather, it takes a group of advisors, each with specific expertise in finance and law and often hand-picked by the billionaire.

Which Bank Has Best Financial Advisors?

How They Ranked

			SCORE	ASSET/WEALTH MANAGEMENT NET REVENUE (MILLIONS) YE 2016	NUMBER OF ADVISORS
	1	Bank of America Corp.	2.33	$17,650	18,688
	2	JPMorgan Chase & Co.	2.83	$12,045	2,504
	3	Wells Fargo & Co.	3.58	$15,946	15,000
	4	PNC Financial Services Group	4.08	$1,151	2,757
	5	U.S. Bancorp	4.50	$2,126	2,157
	6	Citigroup	5.58	$2,961	715
	7	BB&T Bank	6.50	$648	1,173
	8	SunTrust Banks	7.33	$585	1,626
	9	Capital One Financial Corp.	7.58	N/A	707
	10	TD Bank (U.S.)	7.92	$343	240

How Often Should You See a Financial Advisor?

What is the ideal frequency with which advisors and clients should meet? Quarterly? Semi-Annually? Annually? And how often should advisors call clients? What about texting?  

Jennifer White, director of client engagement at New Bern, NC-based BlueSky Wealth Advisors, said that when her company acquired a smaller firm that had 120 clients, it was surprised to learn that the company scheduled quarterly in-person meetings with all its clients. That sounded unwieldy to her.

Moreover, these meetings entailed discussing “all tax planning, all estate planning, and insurance reviews,” White stated.

BlueSky Wealth promptly surveyed its new clients and learned that virtually all of them considered quarterly in person meetings excessive. “Most of the clients were high-level executives who were too busy to attend meetings and felt relieved when we offered less frequency,” White said.

BlueSky Wealth concluded that “We only meet with them when we can offer great value for their time,” she said.  Hence, they communicate via text, emails, and phone to develop a bond and meet in-person based on a client’s needs.

Dave O’Brien, chairman of the board at the National Association of Personal Financial Advisors (NAPFA), said, “It’s really about what’s right for the client. It would be imprudent to describe ‘Here’s what you must do.’”

Because clients regularly track their investments on apps, there is less need to meet in person, O’Brien adds.  “Meeting four times a year is arduous for most clients.”

Hartford Funds surveyed 116 financial advisors in person, asking how often they meet with clients and how they prefer to communicate. The survey revealed that 73% favor face-to-face meetings and 64% contact clients weekly in some form. It also indicated that 38% plan to communicate more often with clients.

“It’s a relationship business. For a financial advisor to truly connect with clients, our favored mode is sitting across from them to watch their body language, hear what their goals are, and have a human to human connection,” explained Julie Genjac, the Seattle-based managing director of Strategic Markets at Hartford Funds.

Most advisors ask clients how often they want to meet and establish a plan, Genjac said.  Advisors often communicate monthly via a phone call or email newsletter.  That frequency though can change depending on a client’s needs. 

Top 5 Financial Planning Firms

Choosing a financial advisory firm can be a difficult task, as there are thousands to wade through. Many have specific strengths and offer different ways to invest one’s hard-earned money. It’s always worth doing your research to know which suits your needs and risks best, but often choosing some of the largest financial advisory firms can be a good option. They have proven track records, a variety of products, and significant amounts of transparency.

1. Fidelity Investments

Fidelity Investments earned its name in the brokerage and mutual fund provider spaces. It’s fitting that Fidelity—a word meaning loyalty, support, and faithfulness—is one of the most highly rated investment advisory firms in terms of customer satisfaction and online support. The fund manages nearly $4.2 trillion in assets as of June 2021 and offers a variety of mutual funds for the benefit of all types of investors.

2. The Vanguard Group

Vanguard has been a revelation in the investment management world, especially since the turn of the century. Much like Walmart in the retail sector, Vanguard became king of the hill through cheap prices and a huge variety of offerings. The company is famous for its low expense ratios on funds and passive investment management.

3. Edward Jones Investments

Edward Jones financial advisors offer commission-based and fee-based financial products. Offices are usually staffed by a financial advisor (licensed broker) and one branch office administrator. The branch office administrator acts as an assistant to the financial advisor, filling the roles of a secretary, manager, and co-worker.

The one-broker-per-office model allows clients to choose their broker directly, and deal with that person exclusively. As of 2017, Edward Jones had the largest number of brokers, with 16,095, and, branch offices, with 13,499, among brokerage firms in the United States.

Charles Schwab Corporation

The Charles Schwab Corporation is an American multinational financial services company. It offers banking, commercial banking, an electronic trading platform, and wealth management advisory services to both retail and institutional clients. It has over 360 branches, primarily in financial centers in the United States and the United Kingdom. It is the 13th largest banking institution in the United States with over US$6.6 trillion in client assets.

It is the third-largest asset manager in the world, behind BlackRock and Vanguard. It had 29.0 million active brokerage accounts, 2.1 million corporate retirement plan participants, 1.5 million banking accounts, and $7.57 trillion in client assets as of July 16, 2021. It was founded in San Francisco, California and is headquartered in Westlake, Texas.

Merrill

Merrill Edge is a financial platform owned by Bank of America. It offers access to online and advised investing, trading, brokerage, and banking services. Customers can be self-directed, work with advisors, or access portfolio management through Merrill Edge Guided Investing. In recent years, Bank of America has opened 600 new Merrill Edge investment centers (bringing the total to 2,800) and added 300 financial solutions advisors to its stable.

Since launching in 2010, Merrill Edge has offered a convenient way for investors to manage their banking and brokerage needs under one roof. Customers can take advantage of Bank of America’sPreferred Rewards program, which offers discounts like preferred pricing on Merrill Guided Investing accounts and discounts on ATM transactions, auto loan interest rates, and mortgage origination fees.

Read Also: Do you Really Need a Financial Advisor?

The higher your average daily balance in your Bank of America and Merrill investment accounts, the better the perks—which means there is an incentive for Bank of America customers to open a Merrill Edge account.

Merrill Edge is a solid choice for long-term, DIY investors, especially those who already have a relationship with Bank of America. It’s also a good choice for investors who want varying degrees of financial guidance. We’ll look at Merrill Edge’s features, costs, and resource quality to help you decide if it’s the right fit for your investing style.

Bottom Line

Financial advisors can impact more than just your retirement portfolio. They can also help you manage difficult student loan repayments, help with proper estate planning, and even ensure you have enough money for your children to attend college.

A financial advisor should be one of the first people you contact if a spouse were to die or become disabled, if you earn an inheritance, the IRS is auditing you, or you are facing a divorce. Don’t wait until your financial situation is in the red before you seek out the help of an expert.