You might even receive a discount if a friend or family member refers you to the advisor.
Looking for an advisor?: Find a financial advisor near you or online
If you don’t mind doing a little research, several organizations offer free databases you can use to find financial advisors.
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CFP Board: A certified financial planner is a type of financial advisor who undergoes rigorous training and education in virtually all aspects of financial planning, including investments, taxes and insurance. The CFP Board certifies these professionals. The CFP Board’s Let’s Make a Plan website offers a search tool to help you find CFPs in your area.
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National Association of Personal Financial Advisors (NAPFA): Enter your zip code, and the National Association of Personal Financial Advisors’s search tool will give you details about fee-only advisors near you. From there, you can contact them directly through a form on the NAPFA’s website.
If you’re just starting out or prefer a hands-off approach, a robo-advisor may be enough.
These platforms invest your money automatically at a lower cost than traditional advisors. You can get started in minutes by answering a few questions about your goals and risk tolerance.
While these robo-advisors have gained popularity with hands-off investors, some robo-advisors also offer insight from a human financial advisor.
Betterment, for example, offers access to CFPs through its Premium tier. Meanwhile, SoFi Automated Investing gives clients one complimentary 30-minute session with a financial planner, and SoFi Plus members get access to unlimited sessions.
If you live in a small town or simply prefer flexibility, working with an online financial advisor can be a strong option. Many financial advisors now offer virtual services via Zoom, email or over the phone.
If you’re indifferent to the physical location of your financial advisor, companies such as Facet Wealth charge an annual flat fee and exclusively offer online advisory services. And you can turn to the best national financial advisors, too.
You’ve narrowed your search to a few solid candidates, but the work isn’t over yet. Here’s what to do next.
Most financial advisors will offer a free consultation that might be as short as 15 minutes or as long as an hour. Get the most out of this time by learning about the advisor’s background and investment philosophy and asking questions about their fee structure.
“Interviewing multiple advisors will help you get a feel for the different approaches and styles they have,” says Cody Lachner, a certified financial planner and founder of Next Adventure Financial. “Advisors do have specializations, so it’s important to choose one that’s truly aligned with what you need.”
You should also check a financial advisor’s credentials. After all, there are many different types of financial advisors out there.
Look for an advisor who works as a fiduciary — they’re required to act only in your best interests.
Advisors may also appear on the following sites, allowing you to research information such as their employment history, years of experience and disciplinary record:
Before choosing a financial advisor, identify your specific financial goals, whether it’s retirement planning, investment management, debt reduction, managing student loans or saving for your first home
If their area of expertise doesn’t overlap with your financial priorities, you might want to continue your search elsewhere.
Get started: Match with an advisor to help you achieve your financial goals
How much a financial advisor charges you and how often is a crucial part of the vetting process. Some financial advisors charge a percentage of your assets under management, typically between 1 and 1.5 percent.
“If you’re comfortable managing your own investments, you don’t need to pay a percentage of your assets,” says Lachner. “There are advisors who can offer advice for a flat fee.”
Be wary of working with an advisor who is unwilling to clearly explain their compensation structure.
Think of your first interaction with a financial advisor as a job interview. Coming prepared with a few key questions can save you time and money.
Here are some questions to ask a financial advisor:
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How long have you been working as a financial advisor?
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What is your area of expertise? Do you specialize in a specific area of finance, such as investments or tax planning?
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Are you fee-only, fee-based or commission-based?
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How much do you charge for your services?
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What is your investment philosophy?
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How do you handle conflicts of interest?
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How often do you communicate with clients?
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How do you track and measure progress toward financial goals?
“Working with a financial advisor involves a lot of trust, so be sure you’re choosing the best one for you and your family,” says Lachner.
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What is the average cost of using a financial advisor?
The average cost of a financial advisor depends on the type of advisor and their fee structure. Traditional financial advisors typically charge around 1 percent of assets under management (AUM) annually, while robo-advisors charge about 0.25 percent of AUM. Some advisors offer hourly rates (which can range from $150 to $300 per hour) or a flat fee, which can start at $1,000.
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Can I talk to a financial advisor for free?
Yes, some financial advisors offer a free initial consultation, during which you can discuss your financial goals and see if the relationship is a good fit. However, ongoing advice and services usually come with a fee. Robo-advisors and some online platforms may provide free basic guidance but charge for personalized financial planning.
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What are the top three things to look for in a financial advisor?
First, make sure the financial advisor is a fiduciary, meaning they’re legally required to act in your best interest rather than prioritizing commissions or sales. Next, check their credentials and experience — designations like certified financial planner (CFP) or chartered financial analyst (CFA) indicate a strong background in financial planning and investment management. Finally, make sure they have a transparent fee structure, so you understand the cost.
Finding a financial advisor isn’t about picking the first name on Google. It’s about matching your financial goals with the right professional. Whether you use an online tool or lean on referrals, make sure the advisor is a fiduciary, transparent about fees and aligned with your financial needs.
Learn more: Pros and cons of hiring a financial advisor
Editorial Disclaimer: All investors are advised to conduct their own independent research into investment strategies before making an investment decision. In addition, investors are advised that past investment product performance is no guarantee of future price appreciation.
