Managing your money isn’t easy. You have to pay your current bills on time, put away savings for emergencies or unexpected expenses, and also think ahead. You need to save for retirement and make sure you’re in a good financial place for your future.

And these can feel like impossible goals if you aren’t a financial expert. If you’re considering getting help with your savings, investments, or overall finances, a financial advisor could be the answer. In order to choose the right financial advisor, you’ll need to understand what financial advisors can do for you.

What is a Financial Advisor?

A financial advisor is someone who helps others manage their money. Financial advisors help you plan for your personal financial goals, whether that’s saving for retirement, increasing your funds so you can make a big purchase, or growing your wealth.

And financial planning with a financial advisor is different for every person. A financial advisor will craft a plan for managing your money that suits you as an individual. There are even different types of financial advisors that can serve different needs.

The following are a few of the different types of financial advisors you can choose from.


Robo-advisors are essentially digital financial advisors. You partner with an online service, answer a few questions, and let computer algorithms build an investment portfolio for you. From there, your robo-advisors monitor and rebalance your investments as needed. They’re often one of the cheapest financial planning options.

Online Financial Planning Services

These types of financial advisors are similar to robo-advisors, but they offer human advice and access. Online financial planning services will blend together a personal plan created by a team of human financial advisors and robo-advisor portfolio management. Once your financial plan is in place, your portfolio will be managed with automated check ins and rebalancing. If you have any questions, you’ll be able to reach out to a human financial advisor.

Traditional Financial Advisors

A traditional financial advisor can be known by many names: financial planner, financial consultant, broker or stockbroker, and even wealth manager. But all of these unique names simply mean that someone is a financial advisor. 

And a financial advisor can encompass many different roles. Typically, financial advisors offer planning advice, manage investments, sell financial products, make recommendations, and guide your money moves.

The Benefits of Working With a Financial Advisor

People can choose to enlist the help of a financial advisor for any number of reasons. But there are plenty of benefits to doing so.

If you’re at a loss – or even a little unsure – with what you should do with your money, a financial advisor can give you expert advice and recommendations. Financial advisors can help you figure out important financial moves, like:

  • How much you need to save to achieve your goals.
  • What accounts are best for retirement and other savings.
  • Recommended emergency funds.
  • How to improve your tax situation.
  • How to achieve goals in certain time frames.

Additionally, a financial advisor can take a look at your financial behavior. If there are any patterns that are costing you more money or impacting your savings, they can offer recommendations to make changes. They can also educate you on ways to improve your savings and cut expenses.

But there’s one other important benefit to working with a financial advisor. A financial advisor can improve your investments’ performance, earning you more money.

A recent Vanguard study found that using a financial advisor can increase your financial earnings by as much as three percentage points each year. While that might not sound like a big difference, it can total thousands of dollars in investment growth.

For example, if you invest $8,000 each year for 10 years without a financial advisor, you’d earn approximately $118,269. With a financial advisor, you’d earn 10 percent on that same money – giving you a total savings of $140,249. That’s more than $20,000 more!

This means a financial advisor could help you put tens of thousands of additional dollars into your bank account.

How to Search for and Find a Good Financial Advisor

Once you’ve decided that working with a financial advisor is the right choice, it’s time to find an expert. And in order to put your finances in the best possible situation, you’ll want to choose a financial advisor who’s a good fit for your needs.

In order to make this important decision, you’ll want to know how to search for the best financial advisor available – and how to narrow down your options.

As you begin looking at different financial advisors and options, you’ll want to make sure to follow these steps.

Check Qualifications

Your first step in researching any financial advisor or financial planning service should be to verify qualifications. The best, most reputable and trustworthy financial advisors will have all of the necessary certifications, qualifications, and background education.

There are a few different licenses and certifications a financial planner can have. You’ll want to look for either a CFP, CFA, CPA, or ChFC. The CFP, or Certified Financial Planner, license is considered the “gold standard” of financial planning. It’s the best certification an advisor can have.

Ask Questions

In order to determine how knowledgeable a financial advisor is, you’ll want to ask questions. This will also help you judge whether or not their advice is a fit for your needs.

You should ask the following questions when consulting with or considering different financial advisors:

  • Who do you work for?
  • What are your certifications, qualifications, or licenses?
  • Are you a financial fiduciary? 
  • How long have you been in practice?
  • Do you have any complaints or disclosures on your record?
  • What kinds of services do you provide?
  • How do you communicate with clients?
  • Who will be the custodian for my investments?

Consider Fees and Billing

Before choosing a financial advisor, it’s critical that you know what costs and fees you’ll be paying. There are three ways financial advisors typically charge their clients.

Commission-Based: Your financial advisor sells financial products like mutual funds or insurance and earns a commission on every sale. This can be problematic, as it can influence which products your advisor recommends.

Fee-Based: Fee-based financial advisors charge a fee for their financial planning, advice, and recommendations. They can also sell products and earn commissions, depending on the company they work within. 

Fee-Only: Financial advisors who work on a fee-only payment structure only make money by charging a flat fee, an hourly rate, or a percentage off the assets they manage. This is the most straightforward option, as there are no commissions or advice fees. You’ll get comprehensive advice and only pay fees on your earnings.

Search and Compare

Lastly, it’s important to search for different types of financial advisors and compare their offerings and costs. There are plenty of different types of financial advisors, and each works in its own unique way. Your best course of action is to search for financial advisors who work specifically on your financial goals. Then, you can compare the experts and determine who’s the best through comparison.