Choosing a Financial Advisor

To get the best financial advisor, you need to know how to choose the one best for yourself. Choosing a financial advisor is something that everyone who needs assistance with their finances should do. Most of these people are business owners, executives, and so much more.

Choosing a Financial Advisor

It is the duty of a financial advisor to offer a better way for people to manage their money and reach their financial goals. They also carry out other duties that make them important to have. This article will educate you on choosing a financial advisor.

Who is a Financial Advisor?

A financial advisor is a professional who anticipates providing financial assistance to people depending on their financial flexibility. They ensure that their clients get a better way to manage their funds and a better way to meet their financial goals. Financial advisors also offer a variety of planning services, ranging from investment management to estate planning to budgeting guidance.

Why Do I Need a Financial Advisor?

To find the perfect solution to your financial problem, you need a financial advisor. They will make sure that you plan your financing better and do not spend on things that are not needed or necessary. A financial advisor will ensure that your financial problem is resolved properly and effectively.

Steps to Choosing a Financial Advisor

Before choosing a financial advisor, there are some steps you need to follow. These steps will help you identify the best financial advisor you need. Another thing is that these steps are very easy to follow up on and carry out. Below are the steps to follow to choose a financial advisor;

1. Know the Financial Service you need

This step requires you to know your reasons for needing financial help. Knowing them helps you get the best advisor to solve that problem. A few questions are given below to help you with this step.

  • Do you need any help with a budget?
  • Are you in need of assistance with investing?
  • Will you like to create a financial plan?
  • Do you need to get an estate plan order?
  • Do you need to create a trust?
  • Do you need help with your tax?

Any answer you give to these questions will determine the type of financial advisor you need.

2. Find out which financial Advisor has your back

There are varieties of financial advisors you can choose from, some of which are investment advisors, certified financial planners, brokers, financial coaches, financial therapists, and so on.

This step requires you to identify which financial advisor has your back in your situation. Every financial advisor has their own set of credentials, so you must determine which one meets your requirements.

3. Know About Financial Advisor Options

There are different ways to get financial advice. They are not easily found at your neighborhood bank or office. Depending on your personal preferences, your budget, and the services you need, you can select the financial advisor option that’s best for you. What you need to do is identify the option that meets your needs.


This is a digital service offering simplified, low-cost investment management. All that is required of you is to provide answers to some online questions, and the computer algorithms will build an investment portfolio according to your risk tolerance and your goals.

  • Low cost: Fees begin as low as 25% of your balance, and many services have no or low account minimums to allow starters to start with a small amount of money.
  • Good when: A person is in need of help investing for financial goals such as retirement but cannot afford a complete financial plan.
  • Look elsewhere if: Look elsewhere if you are in need of more diligent financial planning. Although, some Robo-advisors offer higher-tier financial planning services.

Online Financial Planning Services and Advisors

Online financial planning services offer virtual access to human financial advisors. This is known to be the next step to take with a Robo-advisor. An online service may offer the same automated investment management as a Robo-advisor.

Also, they may offer the ability to consult a team of financial advisors when answers are needed to your questions. You will be connected with a dedicated human financial advisor who will help you manage your investments and work with you to create a holistic financial plan.

  • Medium cost: An online financial planning service will usually cost less than a traditional financial advisor but more than a Robo-advisor. Some online services have proportionally high investment requirements of $25,000, while others require no minimum investment.
  • Good when: A person is comfortable meeting with an advisor online and would still like holistic financial planning services, for example, a retirement plan, estate planning, or help with company stock options.
  • Look elsewhere if you’d rather work with an advisor in person.

Traditional Financial Advisors

These types of advisors can meet with you in person and help with all your financial planning needs.

  • High cost: This is frequently the most expensive option. Countless traditional advisors demand that about 1% of your assets be under management. While some advisors also require a high minimum balance, like $250,000 in assets.
  • Good when: You want a specialized service, you have a complex situation, and you wish to meet your financial advisor in person and create a long-term relationship with them.
  • Look elsewhere if you prefer getting help online, don’t want to evaluate a potential advisor yourself, or want a similar service for less.

4. Determine how much you can afford to pay a Financial Advisor

Financial advisors are known to be expensive, but every budget has an option. You first need to be knowledgeable of how much a financial advisor costs before you commit to hiring one. However, there are three main cost levels you may come across. Below, they are stated.

  • Robo-advisors: This type of advisor often demands an annual fee, which is a percentage of your account balance with the service. They usually start at 0.25% of the assets they manage for you, with many top providers charging 0.50% or less.
  • Online financial planning services and advisors: They customarily charge a percentage of your assets, a flat subscription, both, or sometimes both.
  • Traditional financial advisors typically charge a percentage of the managed amount, with a median fee of 1%. It is true that it can range from a lower to a higher account and vice versa.

All you need to do is determine the amount of money you should pay depending on your assets, budget, and the level of financial assistance you need.

5. Evaluate the Financial Advisor’s Background

If you decide to work with a traditional financial advisor, there is a need for you to evaluate their background and past records. Verify every credential they claim to have and confirm if they have any disciplinary issues, including fraud. Also, if you have chosen an online financial advisor, it is still a good idea to do this.