There is a financial advisor for every budget and financial situation. Here’s a look at the types of financial advisors, and how to choose the right advisor for you.
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This is our main savings guide, but there are other options that can pay even more...
- Lifetime ISA: 25% bonus for first-time buyers aged 18 to 39
- Help to Save: 50% bonus on savings if you’re on a low income
- Cash ISAs: The likely winner if you pay tax on savings interest
- Regular savings: Up to 7% interest if you can save monthly
- Children’s savings: Earn up to 5% on kids’ savings
- Current accounts: Earn up to 5.12% on smaller sums
Steps
1. Know what financial services you need
2. Learn which financial advisors have your back
3. Do I need European breakdown cover?
4. Consider how much you can afford to pay an advisor
Financial advisors help people manage their money and reach their financial goals. They can provide a range of financial planning services, from investment management to budgeting guidance to estate planning. Picking the right financial advisor for your situation is key — doing so means you won’t end up paying for services you don’t need or working with an advisor who isn’t a good fit for your financial goals. Here’s how to find the right financial advisor for you.
1. Know what financial services you need
Identify why you’re looking for financial help by asking the following questions:
Do you need help with a budget?
Do you want help investing?
Would you like to create a financial plan?
Do you need to get your estate plan in order or create a trust?
Do you need tax help?
Your answers to these questions will help determine what kind of financial advisor you’ll need. If you just want assistance investing, a robo-advisor can invest for you for a minimal fee. If you have a complex financial life you may want to work with an online or traditional financial advisor.
2. Learn which financial advisors have your back
Financial advisors go by many names: investment advisors, brokers, certified financial planners, financial coaches, portfolio managers. There are even financial therapists. So who does what — and who can you trust?
Since some of the most common titles advisors use, including the term “financial advisor” itself, aren’t tied to any specific credentials, don’t assume that someone who uses an official-sounding title has any specific training or credentials. Anyone who gives investment advice (which most financial advisors do) must be registered as an investment advisor with either the U.S. Securities and Exchange Commission or the state, depending on their assets under management.
Some financial advisors have a fiduciary duty to their clients, meaning they are obligated to act in their client’s best interest rather than their own. Always work with a licensed, registered fiduciary — preferably one who is fee-only, which means the advisor is paid directly by you and not through commissions for selling certain investment or insurance products. Certified financial planners have a fiduciary duty to their clients as part of their certification.
3. Do I need European breakdown cover?
Financial advisors go by many names: investment advisors, brokers, certified financial planners, financial coaches, portfolio managers. There are even financial therapists. So who does what — and who can you trust?
Since some of the most common titles advisors use, including the term “financial advisor” itself, aren’t tied to any specific credentials, don’t assume that someone who uses an official-sounding title has any specific training or credentials. Anyone who gives investment advice (which most financial advisors do) must be registered as an investment advisor with either the U.S. Securities and Exchange Commission or the state, depending on their assets under management.
Some financial advisors have a fiduciary duty to their clients, meaning they are obligated to act in their client’s best interest rather than their own. Always work with a licensed, registered fiduciary — preferably one who is fee-only, which means the advisor is paid directly by you and not through commissions for selling certain investment or insurance products. Certified financial planners have a fiduciary duty to their clients as part of their certification.
| Fee-Only Financial Planner | Fee-Based Financial Planner |
|---|---|
|
Paid directly by clients for their services and can’t receive other sources of compensation, such as payments from fund providers
|
Paid by clients but also via other sources, such as commissions from financial products that clients purchase
|
|
Act as a fiduciary, meaning they are obligated to put their clients’ interests first
|
Brokers and dealers (or registered representatives) are simply required to sell products that are "suitable" for their clients
|
4. Consider how much you can afford to pay an advisor
Financial advisors go by many names: investment advisors, brokers, certified financial planners, financial coaches, portfolio managers. There are even financial therapists. So who does what — and who can you trust?
Since some of the most common titles advisors use, including the term “financial advisor” itself, aren’t tied to any specific credentials, don’t assume that someone who uses an official-sounding title has any specific training or credentials. Anyone who gives investment advice (which most financial advisors do) must be registered as an investment advisor with either the U.S. Securities and Exchange Commission or the state, depending on their assets under management.
Some financial advisors have a fiduciary duty to their clients, meaning they are obligated to act in their client’s best interest rather than their own. Always work with a licensed, registered fiduciary — preferably one who is fee-only, which means the advisor is paid directly by you and not through commissions for selling certain investment or insurance products. Certified financial planners have a fiduciary duty to their clients as part of their certification.
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5. Vet the financial advisor’s background
Financial advisors go by many names: investment advisors, brokers, certified financial planners, financial coaches, portfolio managers. There are even financial therapists. So who does what — and who can you trust?
Since some of the most common titles advisors use, including the term “financial advisor” itself, aren’t tied to any specific credentials, don’t assume that someone who uses an official-sounding title has any specific training or credentials. Anyone who gives investment advice (which most financial advisors do) must be registered as an investment advisor with either the U.S. Securities and Exchange Commission or the state, depending on their assets under management.
Some financial advisors have a fiduciary duty to their clients, meaning they are obligated to act in their client’s best interest rather than their own. Always work with a licensed, registered fiduciary — preferably one who is fee-only, which means the advisor is paid directly by you and not through commissions for selling certain investment or insurance products. Certified financial planners have a fiduciary duty to their clients as part of their certification.
FAQ
What are the best stocks for beginners?
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Is now a good time to buy stocks?
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How do I buy stocks online without a broker?
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How much can you save using the five-step cheap petrol system?
MoneySavers who have tried this have made big savings off the bat (and see below for our estimates of how much you could save taking this to the max)…
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