How to Find a Financial Advisor on a Low Income Budget

Developing money management skills can help you get better at saving and investing, both of which are important for building wealth. A financial advisor can lend their expertise to help you achieve your financial goals. If you have a low income or limited budget, you may assume that hiring an advisor is off the table. While it may require a little research on your part, it’s possible to find a financial advisor for low-income clients with these tips.

If you’re ready to connect with a financial advisor, SmartAsset can help you find the right type of professional for your needs.

What Does a Financial Advisor Do?

Financial advisors work with clients to help them develop a plan for managing their money and reaching their goals. That typically involves offering advice relating to investing and tax planning. Financial advisors can charge fees for their services, with typical costs around 1% of assets under management.

But is a financial advisor worth it? The short answer is that anyone can benefit from professional financial advice, regardless of their net worth or income. Advisors can share a level of knowledge and experience that many investors lack.

Does that mean everyone needs an advisor? Not necessarily. Some people may be perfectly comfortable with managing their portfolios themselves.

However, if you’re in a lower income bracket and you want to start building wealth, a financial advisor could help you.

Can You Hire a Financial Advisor for Free?

While financial advisors may offer a free consultation, they typically expect to be paid for their services if used on an ongoing basis. Advisors may be fee-only or fee-based, and it’s important to understand the difference.

A fee-only advisor charges fees based only on the advice and services they provide. They may charge an hourly fee, a flat rate or a percentage of assets, but at the end of the day, you only pay your advisor for the work that they do for you.

Fee-based advisors may also earn money by recommending specific investment products. For example, if your advisor suggests a specific mutual fund, they may earn a commission if you decide to invest in it.

It is important to remember that some, but not all, fee-based advisors are required to follow a fiduciary standard.

Benefits of Working With a Financial Advisor

If you don’t have a lot of income or assets yet, hiring an advisor may not seem worth it. However, while this ultimately depends on your needs and goals, an advisor may be able to pinpoint steps you might overlook yourself.

These are some of the benefits of working with a financial advisor when you have a low income.

Potential tax savings. You may already be in a lower tax bracket based on income. However, an advisor might be able to help you find additional ways to avoid paying taxes on your investments, potentially putting more money back into your budget for you to save and invest.
Retirement planning. It can feel overwhelming when you begin planning for retirement, but a retirement financial advisor can help. For instance, they may offer advice on how to make the most of your 401(k) or share the benefits of opening an individual retirement account (IRA).
Minimize investment fees. Investing can help you build wealth, but it can be an uphill battle if you’re paying back a sizable chunk of your returns in fees. An advisor may help you find low-cost investments that fit your objectives and risk tolerance.

Market volatility is another crucial consideration when deciding whether you should use a financial advisor on a low income. When the market becomes volatile, an advisor can help you avoid emotional investing, so you do not make rash decisions.

It’s tempting to sell when stock prices begin to fall, but that could do more harm than good. An advisor can talk you through potential outcomes based on whether you sell your investments or hold them, so you can make a better-informed decision.

How to Find a Financial Advisor for Low-Income Individuals

Financial advisor working with a client.

If you want to work with a professional and have a low income, you need to know how to find the right advisor.

To begin, use the SmartAsset matching tool to find advisors in your local area. Answer a simple questionnaire about your needs and goals, and then you will receive recommendations for advisors who might be a good match.

Should you choose to meet with an advisor, it is critical that you ask the right questions to get a sense of whether they might be right for you.

What types of services do you offer?
Are you a fiduciary?
What is your investment strategy or style?
How do you get paid, and what fees can I expect to pay?
What’s your preferred method of communication?
How often will we communicate?
Is there anyone else on your team that I might work with?

The fee question is important because you want to know upfront whether an advisor is in your budget range. If you talk to some advisors and find that the fees are out of reach at the moment, you still have some other options to potentially receive free or low-cost financial advice.

Pro Bono Financial Planners

One option is to search for pro bono financial planners in your area. The Financial Planning Association has a pro bono program that offers services to people in underserved and/or high-risk communities.

This includes not only low-income individuals and families but also military personnel and veterans, domestic violence survivors, those affected by natural disasters and those experiencing serious medical crises.

Robo-Advisors vs. Financial Advisors

A robo-advisor is another option. Robo-advisors use an algorithm to develop a personalized investing plan based on factors like your age, goals and risk tolerance.

However, the main appeal is their affordability. With financial advisors typically charging a 1% annual fee, SoFi reports that robo-advisor fees average 0.2% or 0.3% in comparison.

Of course, a robo-advisor lacks the human element. This may not seem important if your goal is saving money on fees, but it can make a difference when the market gets bumpy. In that scenario, a robo-advisor can’t coach you through the ups and downs the way a human advisor can.

Therefore, it is critical to assess the level of personal support you require from your future advisor.

Low-Cost Planning Tools and Community Resources

Individuals with limited budgets may turn to free or low-cost resources when managing their finances. These options can provide basic information and help people understand common financial topics before they decide whether to work with a professional.

Many community organizations offer educational programs at no cost, including workshops, budgeting classes or informational sessions on saving and debt management. Nonprofit credit counseling agencies sometimes provide similar services, focusing on foundational topics like household budgets and debt repayment structures.

Public libraries can also serve as a resource by offering access to books, digital courses and occasional financial literacy events. Some colleges or extension programs host introductory classes that cover general financial concepts.

There are free online tools that may be useful, as well. Budgeting apps, calculators and financial education websites are widely available at little or no cost. These tools can help users track income and expenses or explore different planning scenarios.

These types of resources can support early efforts to learn about financial topics. While they do not replace professional advisory services, they can be an excellent supplemental tool for your investments.

Bottom Line

Low income family working with a financial advisor.

A financial advisor can help you shape a plan for managing your money, even if you have a low income. As your income grows, an advisor can help you adjust your financial strategy to expand your holdings. You can search the top financial advisors in your area and ask for a free consultation; doing so can help you better understand how working with a financial professional can benefit you and your financial future.

Financial Planning Tips

If cold-calling advisors seem too intimidating, you can start your search online. Finding a financial advisor doesn’t have to be hard. 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.
Reading personal finance books or blogs is another way to get money advice for free. You can also try listening to some personal finance podcasts to learn the basics of investing if you’re new to the market. Expanding your financial education can make it easier to take the reins of managing your money when you’re not quite ready to work with an advisor.