What Does a Financial Advisor Do?
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A financial advisor helps you manage your finances or manages them for you. Generally speaking, a financial advisor will assess your current financial situation — including your assets, debts and expenses — identify areas for improvement, and help you create a financial plan.
Most financial advisors do the following:
Help you create an emergency fund.
Assist with saving and budgeting.
Plan to meet short- and long-term goals.
Help create plans to pay off debt.
Investment management.
Retirement planning.
Tax planning.
» Looking for an advisor? View our picks for the year’s best financial advisors
In some cases, you can choose which services you want or need based on the type of financial advisor you select.
"Financial advisor" is a catch-all term that describes a wide variety of people and services, including investment managers, financial consultants and financial planners. For example, a financial planner usually focuses on creating and analyzing financial plans and may not provide direct investment advice and/or manage assets.
It’s also important to find a professional who is skilled in the area you need help with. You may need help navigating complex matters such as taxes, estate planning and paying down debt. Or investing with a certain strategy or asset, such as crypto. Crypto and crypto taxes are relatively new to the investment world, and some financial advisors may know the area better than others.
That’s why it’s important to remember to interview various advisors to find someone who meets your needs and who you feel comfortable discussing your personal financial situation with. You can use our list of 10 questions to ask a financial advisor.
» Not sure where to begin? Learn how to choose a financial advisor.
Fees $2,600 and up per year per year (free initial consultation) | Fees 0.30% management fee | Fees Up to 1% per year |
Account minimum $0 | Account minimum $50,000 | Account minimum $250,000 |
Promotion None no promotion available at this time. | Promotion None no promotion available at this time | Promotion $250 off one year of financial or tax planning |
AD Paid non-client promotion | AD Paid non-client promotion | AD Paid non-client promotion |
How financial advisors get paid
Financial advisors make money in different ways.
Assets under management (AUM) fees: Some advisors charge an annual fee that is a percentage of the amount of assets they manage for you.
Commissions: Some get commissions from the products they sell to you (annuities, life insurance, mutual funds, etc.).
Trading fees: Some charge commissions on trades they place on your behalf.
Fixed rate: Some charge an hourly or flat fee for the services they provide.
Often, financial advisor fees are a combination of these methods. Don’t be afraid to ask an advisor what they charge, and compare their fees to others before moving forward.
» Dive deeper: How much does a financial advisor cost?
When to get a financial advisor
You may want to work with a financial advisor if you are:
Struggling to prioritize your financial goals
Need a plan for where and how to save
Want help with investment management
We devised a quiz below that could help you determine if it's time to get a financial advisor.