A financial advisor can provide valuable guidance to help you achieve your financial goals. Advisors offer a variety of services that include financial planning, investment management, retirement income planning and more. Finding a financial advisor will likely require some research, an understanding of your financial situation and some general knowledge of the industry. Below are some important steps you’ll want to follow in order to find a financial advisor who can help you and your family.

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Your search for a financial advisor (sometimes written as “financial adviser”) should start with a simple question: What do you need help with?

The financial advisory industry features thousands of advisors offering a wide variety of services. Some focus on holistic financial planning, while others specialize in investment management or retirement. Many work to meet the needs of specific clientele, such as high-net-worth individuals or business owners. Identifying your needs is critical to finding a suitable advisor.

Here are some common areas of need that a financial advisor may help you with:

Kristin McKenna, managing director at Darrow Wealth Management in Boston, said consumers should put a higher priority on finding an advisor who meets their needs, rather than one who’s located nearby.

“Especially in today’s Zoom world, investors should consider prioritizing the right overall fit with an advisor versus limiting their search to professionals in their immediate area,” said McKenna, a Certified Financial Planner™ (CFP®). “This is especially true for investors with a nuanced or complex situation, as they may benefit a lot more by working with an advisor who specializes in that practice area.”

A financial advisor is a professional who helps guide and direct clients’ decision-making on various aspects of their financial lives. A financial advisor may offer guidance on managing investments, planning for taxes and making retirement projections.

The term registered investment advisor (RIA), which is often spelled with an “e” by government agencies, is a legal designation that refers to an individual or company that is registered as such with either the SEC or a state securities regulator.

Until relatively recently, the term “financial advisor” was used to describe various positions across the financial industry. However, a recent regulation from the U.S. Securities and Exchange Commission (SEC) called Regulation Best Interest (Reg BI) has limited who can use the title. Financial advisors generally are also registered investment advisors (RIAs) or investment advisor representatives.

Conversely, when broker-dealers use these terms in their names or titles in the context of providing investment advice to a retail customer, they will generally violate the capacity disclosure requirement under Reg BI. The disclosure requirement generally refers to rules requiring advisors to appropriately inform customers of the scope and terms of their relationship as well as material facts related to conflicts of interest when making a recommendation.

Any advisor registered with the SEC is legally required to abide by fiduciary duty, and as a result, must put clients’ interests ahead of their own. According to the SEC, fiduciaries are expected to exercise a duty of care and a duty of loyalty to clients, and as a result, are “held to the highest standard of conduct.”

On the other hand, Reg BI under the Securities Exchange Act of 1934 establishes a “best interest” standard of conduct for broker-dealers and associated persons when they make a recommendation to a retail customer of any securities transaction or investment strategy involving securities, including recommendations of types of accounts.

While both aim to protect clients, the fiduciary standard is more stringent and comprehensive, requiring ongoing loyalty, while Reg BI focuses on specific transactions without a continuous duty.

Working with an advisor who abides by fiduciary duty assures you of knowing they’re legally obligated to put your interests first. While a fiduciary can still have conflicts of interest, knowing that they have a duty of trust and loyalty to you, the consumer, can give you some peace of mind. That’s why most experts recommend asking an advisor whether they abide by fiduciary duty when you first meet with them. You can also use a service like SmartAsset’s free matching tool, which matches would-be clients with fiduciary financial advisors.

Whether a financial advisor is a fiduciary or not is just one of the many ways advisors can differ from one another. Here’s a look at some of the most common types of financial advisors that may be able to offer you the services you need:

These advisors are primarily focused on giving investment advice and managing client portfolios. Investment managers often work for firms that are RIAs or are RIAs themselves. RIAs must register with the SEC and abide by fiduciary duty.

If you’re looking for financial advice that goes beyond investing, you’ll likely want to work with a financial planner. Financial planning can involve examining your financial situation and building a specific plan that aims to reach your long- and short-term goals. Financial planners work to provide holistic advice that may touch on a person’s needs for retirement, budgeting and cash flow, estate planning, insurance and more. They could also focus on just one or two specific areas as well.

While some investment managers also offer financial planning services, some advisors specifically provide wealth management, a more comprehensive service that combines investment management and financial planning under a single umbrella.

Don’t think you need the personal touch of a human advisor? Robo-advisors are platforms that digitally manage your investment portfolio through risk-based algorithms. They automatically create asset allocations according to your investor profile and rebalance your holdings over time.

Unlike traditional advisors, robo-advisors don’t rely on human intervention, though some firms offer secondary human advisors as part of their package. These platforms often come with lower fees and may be an option for investors who don’t meet account minimums that human advisors often require.

Choosing the right type of financial professional can go a long way to setting your financial goals in motion. Once you’ve established the type of advisor you need, you can move on to determining how to find the right professional and how much you’re willing to pay for their services.

The services of a financial advisor come with a cost, though the types of fees you’ll encounter will likely depend on what services you receive. For example, financial consulting is typically charged on a per-hour basis, while investment management may feature a fee that’s based on a percentage of the total amount of assets you’re investing with the advisor.

Here’s a closer look at the most common financial advisor fee structures that you’re most likely to come across:

Fees that are based on a percentage of your assets under management (AUM) are a common form of compensation for investment management. For example, if your advisor charges an annual fee of 1% and you have $500,000 invested, you might pay $5,000 in fees, depending on how often you’re billed and how your account grows throughout the year.

These fee structures also usually have tiers, with rates dropping as you invest more. In fact, 58% of advisors who charge AUM fees use a graduated rate system, according to a 2024 Kitces.com survey of financial advisors. However, some firms and individual advisors may offer comprehensive wealth management services that include both asset management and ongoing financial planning. Your wealth management fee may also be based on a percentage of your AUM.

Many advisors offer standalone or project-based financial planning services. These offerings allow clients to receive specific, targeted services for a set price. For instance, standalone financial planning is often offered for a flat fee. The median fee for a standalone financial plan was $3,000, the 2024 Kitces study found.

Additionally, there are a wide range of advisors who offer financial planning services on an hourly basis, which is similar to standalone financial planning that’s provided for a fixed fee. Again, a rate like this will be laid out in your advisory agreement beforehand. The same 2024 Kitces survey found that half of the respondents’ hourly rates were somewhere between $250 and $350.

Some advisory firms work on annual or quarterly retainers, as well as monthly subscription fees. While this fee structure is becoming more common, it’s not as typical as the three variations above. In fact, 34% of advisors charge retainer fees, and only 9% rely on them exclusively, the 2024 Kitces survey found.

But how much can you expect to pay for each kind of fee? While advisors charge a wide range, here’s a rough guide:

The figures above are examples only and are used to illustrate what typical fees for financial advisors and their structure look like. Advisors partnered with SmartAsset that you may be matched with may charge higher fees than those shown above. Please carefully review fee structures with your investment advisor and review your advisor’s Form ADV and CRS.

When discussing fee structures, you might hear another distinction: fee-only advisors vs. fee-based advisors. Understanding the important differences between these fee structures is paramount for your search for an advisor. Here are the major differences:

That’s a major distinction, and many people limit their search to fee-only advisors. However, this may not matter as much as you think, depending on what services you’re receiving.

“Commissioned advisors are not inherently a bad thing, as long as they are acting as a fiduciary and disclose potential conflicts of interest,” said Michael McDaid, a CFP® at RetirementDNA in Escondido, California.

No matter what type of advisor you choose, keep in mind that a fiduciary advisor has a fiduciary duty. But if you’re working with a dual registrant fee-based advisor, it’s best to establish what role the advisor is acting in when making a particular recommendation.

Before finalizing your choice of a financial advisor, be cognizant of any minimum investment requirements that a firm may impose. These minimum investment requirements can range from as little as a few thousand dollars to as much as tens of millions. Some firms may also require clients to keep a certain amount of money under management to retain their services. About 65% of the advisors surveyed by Kitces said they have a minimum account size requirement, with the typical minimum figure being between $250,000 and $750,000.

However, 35% of respondents didn’t have investment minimums, and are therefore likely open to working with individual clients above and below the high-net-worth threshold. In fact, the 2024 Kitces survey also reports that 71% of respondents at least occasionally waive their minimum, with only 11% saying they stringently enforce theirs.

You can learn whether a firm requires a minimum initial investment or account size by directly asking an advisor or reviewing their Form ADV. Some firms with minimum requirements will also, at times, waive those requirements for some clients at their sole discretion.

Now that you’ve identified your areas of need and even have an idea of how much you’re willing to pay for these services, it’s time to find an advisor. There are a number of tools and strategies you can rely upon to find a financial professional, which can include:

Top Advisors in Your Area

If you’re hoping to find an advisor in your local area, SmartAsset has plenty of resources to help. We have a wide range of curated lists of the top financial advisors in many cities and every state across the country, as well as a list of the top financial advisors nationally.

Financial Advisor Matching Tool

SmartAsset’s free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.

Word of Mouth and Referrals

Despite all of the technology at our fingertips, sometimes old-fashioned word of mouth is just what you need to find the right advisor. If any friends, family members or colleagues work with a financial advisor, ask what they like or dislike about the advisor and see whether they would recommend their services. These recommendations can be particularly helpful if you ask people you trust and are in a similar financial situation to yours.

Advisory Databases

There are many online databases that you can use to find advisors. Some examples include SmartAdvisor Match, the Garrett Planning Network, the National Association of Personal Financial Advisors (NAPFA) and the CFP Board of Standards.

Major Firms

You can also seek out large, national firms with name brands to find an advisor. Financial service giants like Vanguard, Fidelity and Schwab all offer advisory services through traditional human advisors, as well as robo-advisors.

Now comes the all-important phase of vetting and interviewing financial advisors. After you’ve found some potential matches, it’s best to speak with at least three choices and get a sense for what sets each apart. It’s a good idea to choose an advisor who you feel has the right qualifications and specializations to help with your specific needs. Sometimes you can even narrow down your search by vetting your chosen advisors via their certifications or red flags that may come up.

There are a range of financial certifications that advisors can acquire to display or improve their knowledge of a particular topic and the services they provide to clients. So if you’re looking for help with a specific topic or area of need, you’ll likely be able to find an advisor with a corresponding certification. Here’s a look at some common financial advisor professional designations and what you can assume for each:

Certified Financial Planner™ (CFP®)

CFP®s are fiduciary advisors who are well-versed in topics across the financial spectrum. They assess their clients’ full financial portfolios and provide personalized financial plans. To become a CFP®, a professional must complete certain coursework, gain professional experience, then pass an exam consisting of two three-hour sessions and 170 multiple-choice questions. The test is administered by the CFP Board and historically has a pass rate of around just 65%.

Chartered Financial Analyst® (CFA®)

The CFA® designation signals a mastery of financial analytics, trends and markets. Typically, CFA® charterholders work in investment analysis roles at financial advisor firms, investment firms, insurance companies, banks or investment funds. The requirements to become a CFA® are significant. A candidate must pass three difficult exams and have at least 4,000 hours of qualified professional experience or higher education. Between 2015 and 2024, only 44% of candidates passed the CFA® exams, according to the CFA® Institute.

Chartered Financial Consultant® (ChFC®)

The ChFC® certification was created as an alternative to the CFP® designation. Those who become a ChFC® professional receive training in specialized, contemporary fields of financial planning. Some examples include planning for blended families, divorcees and other areas not included in the standard CFP® course. The course is run by the American College of Financial Services and requires considerable study and testing.

Certified Public Accountant (CPA)

A CPA license typically recognizes accountants, tax preparers and financial analysts. It is one of the more common financial certifications in the industry. A CPA can be helpful for those looking for financial advice regarding minimizing taxes, business financial planning and organizing investments.

Chartered Life Underwriter® (CLU®)

The CLU® designation is the top choice certification for insurance agents. There is no comprehensive exam, but candidates have to take five courses administered by the American College of Financial Services. Chartered Life Underwriters® are typically experts in life insurance, estate planning and risk management.

While understanding what these certifications mean is important, no final decision should be made solely on the letters that come after your advisor’s name.

“Keep in mind, no matter how outstanding someone’s credentials may appear, the key for any consumer is to find a financial advisor who listens to them and is willing to answer their questions,” said Niv Persaud, a Certified Financial Planner™ and the managing director at Transition Planning + Guidance, LLC in Atlanta.

Remember that some of these credentials alone do not designate someone as a financial advisor. For example, a CPA may not be qualified to advise you on investment or retirement planning. But these credentials, in addition to appropriate regulatory status and experience, may help round out an advisor’s qualifications.

As you’re considering different firms and advisors to potentially work with, it’s important to be on the lookout for red flags and past indiscretions. Here are some factors to keep in mind that may make you wary of moving forward with a particular advisor:

These red flags may not necessarily be a hard “no” in your evaluation process. It’s important, however, to proceed with caution and make sure you understand everything involved with each before making a final decision.

As previously discussed, be sure to check whether the advisor is, in fact, legally bound by fiduciary duty. Remember, RIA firms are held to a fiduciary standard. To be sure, check for the firm’s Form ADV and brochure to determine whether or not they reference their fiduciary duty to clients. You want an advisor who is held to a fiduciary standard.

You can also consider the investment strategies an advisor relies upon when managing client portfolios. Do they specialize in a particular style of investing, or do they incorporate a wide variety of assets in their clients’ portfolios? The advisor’s website should provide some indication of how they invest client assets and what their typical strategies are.

You can also read the firm’s Form ADV brochure and ask about their investment approach during a one-on-one interview. Many firms will tailor their investment strategy to the needs of their clients, but some take a more rigid, model-based approach.

High fees can be a warning sign when choosing a financial advisor, especially if the costs don’t align with the level of service you feel you’re being provided. While fees vary, it’s worth assessing whether the services you expect to receive justify the price. High fees can significantly impact long-term investment growth, particularly if they’re paired with limited service offerings or minimal client interaction, so consider this carefully.

You may want to compare advisor fee structures with industry averages and consider whether the advisor offers comprehensive financial planning, regular portfolio reviews or ongoing guidance that aligns with the cost. Finding a transparent, reasonably priced advisor can help preserve your returns over time while ensuring quality support for your financial goals.

When meeting with a financial advisor, you’ll want to ask about all of the things covered throughout this how-to guide, from certifications to fees to their overall investment strategy. Here are some specific questions you might ask during your consultation:

The right answers to these questions are going to depend on your personal needs and what you’re looking for in a financial advisor.

At this point in the process, you’ve hopefully found a financial advisor who fits your needs. Now let’s take a look at the final steps necessary for you to hire your financial advisor and to start reaping the benefits of their services.

Here are the five things to do once you’ve chosen a financial advisor:

When you’re ready to move forward with your financial advisor of choice, the advisor will want you to sign a handful of documents that solidify and spell out your relationship. If you’re not confident in the things discussed to this point, or aren’t sure about some of what you’re signing, you can consider having the agreements looked at by an attorney. Lastly, make sure these documents clearly lay out your fees, and don’t be afraid to ask questions if you don’t understand something.

Assuming your advisor will be managing your investments, you’ll need to transfer your money to an account that your advisor can access. Investment advisors registered with the SEC must comply with the custody rule, a provision of the Investment Advisers Act of 1940 intended to bolster the safeguards of client assets.

The rule stipulates that client assets must be held by a qualified custodian, which can be a financial institution like a bank, certain foreign entities, futures commissions merchants or a registered broker-dealer.

You may also have to choose how much control to give to your advisor. There are two primary types of portfolio management: discretionary and nondiscretionary.

The more common of these two methods is discretionary, as needing to approve every trade could be time-consuming. If it’s important for your account to be non-discretionary, you should make that a major point of emphasis during the advisor vetting process, though.

Now that you’re a new client, your financial advisor will work with you to create a plan for investing your money and managing your finances. Your advisor will likely talk with you about your financial goals, as well as assess your current financial situation, including your risk tolerance and other important factors. They may formalize this step with what’s called an investment policy statement (IPS), a written document that outlines your goals, risk tolerance, time horizon and asset allocation.

If you’ve hired an advisor solely for financial planning, they’ll begin to craft a comprehensive plan that may include retirement and estate planning, as well as insurance plans and other topics. If you know what you want your plan to include, you should communicate all of your needs as early in your client-advisor relationship as possible.

The final step is to meet with your advisor at least once a year, or as often as you both agree. During these recurring meetings, you’ll receive updates on your portfolio and have the opportunity to address any new developments in your financial life. There is no rule that states how often you can meet with your advisor.

If you have a change in your life that should dictate an alteration to your financial situation, you shouldn’t wait for an annual meeting to discuss it with your advisor. For example, if you get married, you may want to change your estate planning documents or your overall investment strategy. That shouldn’t wait for months until your next scheduled meeting.

Below, we’ve compiled a list of some of the most frequently asked questions and their corresponding answers regarding the services of financial advisors and how to find one:

Why Should I Hire a Financial Advisor?

A financial advisor can help to shape your financial future. They can help you establish financial goals and build a financial plan to put you on the path as you work toward meeting those goals. And they can help you build an investment portfolio that balances your financial goals with your risk tolerance.

Is It Worth Paying a Financial Advisor?

While investment success is by no means guaranteed when working with a financial advisor, many investors find that the benefits to working with an advisor justify the fee. Working with an advisor also means that you don’t have to spend time managing all of your finances on your own. Their experience can also come in handy when your finances take a hit or an unexpected market turn occurs, as they can help to adapt your plan to meet new demands. However, the worth of having a financial advisor is completely dependent on the individual receiving their services, what you’re getting help with and the success of that advisor. That makes the advisor vetting process that much more important, and it’s up to you to do your due diligence to understand the value that a financial advisor can bring you.

Do I Need a Financial Advisor for My Retirement Accounts?

Having a financial advisor for your 401(k) or IRA is not a requirement, especially if you feel confident about what investment decisions to make. But if your 401(k) is just one part of your overall investment strategy, a financial advisor can help you figure out how all of your investments will work together. That level of comprehensiveness could be extremely valuable for many people planning for or approaching retirement.

Do Banks Offer Free Financial Advice?

Banks do not typically offer free personalized financial advice, as many have financial advisors with whom they work with who can provide those services to you. The free advice you may receive from a bank will generally not compare to the guidance you get from an experienced and educated financial advisor.

When Should I Hire a Financial Advisor?

A good place to start when deciding whether to hire a financial advisor is when you can build a considerable pool of savings based on your annual income. You may also want to consider hiring a financial advisor, however, if you receive a large inheritance or have saved a substantial amount of money that you’re ready to invest toward reaching specific financial goals. In the end, there are advisors out there for all different kinds of people, so you can start looking for one whenever you decide you want to.

Do I Have Enough Money to Work With a Financial Advisor?

It’s true that many financial advisors require clients to have a minimum amount of investable assets. Many advisors require at least $100,000, and it’s not uncommon to see minimums set at $500,000 or higher. But there are plenty of advisors who will work with a client with $25,000 or less, and you can also get professional financial advice with no minimum by paying a flat or hourly fee or signing up for a robo-advisor.

If you want to get a sense of the top firms in your area, we’ve reviewed hundreds across the country. These reviews, compiled through extensive research, rank the top firms in a number of cities and states according to AUM, number of individual clients, number of clients per advisor, age of firm and fee structure. They include detailed information on each firm’s investment philosophy, account minimum, certifications and services, all of which can help you decide whether a firm is right for you. The criteria for the matching tool differs from the methodology for the list below and you may not be matched with the advisor firms mentioned in the linked reviews.

The individuals who provided quotes for this article have not been compensated for their participation and are not participants in the SmartAsset advisor platform.

Photo credit: ©iStock.com/Jacob Wackerhausen, ©iStock.com/Jacob Wackerhausen