How to Find and Choose a Financial Advisor

Finding a financial advisor starts with figuring out what you actually need help with. Investment management, retirement planning, taxes and comprehensive financial planning can require different services, credentials and fee arrangements. You may also want to compare how advisors are registered, how much they charge and what legal standard applies when they give you advice. A structured search can help you narrow the field, verify an advisor’s background and understand the relationship, before you hand over any money.

Do you have questions about financial planning, retirement planning or another financial endeavor? Speak with a financial advisor today.

Table of Contents

Step 1: Determine What Financial Services You Need

In searching for a financial advisor, it can help to start by asking yourself a simple question: “What do I 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 funding. Others focus on meeting the needs of specific clientele, such as high-net-worth individuals or business owners. Identifying your needs is key to finding a suitable advisor.

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

• Financial planning: Advisor helps clients evaluate their financial lives and pursue both short- and long-term goals.
• Portfolio management: Advisor manages an investment portfolio or retirement account according to client’s time horizon, risk tolerance and other factors.
• Retirement planning: Advisor works to build a financial plan for retirement that typically covers taxes, investing, income and more.
• Estate planning: Advisor works with clients to build plans for their estates, including trusts, wills, philanthropic giving and more.
• Tax planning: Advisor helps clients build plans for minimizing their taxes over the short and long term.
• Insurance needs analysis: Advisor works with clients to identify areas where insurance could help them.
• Education planning: Advisor aids clients in leveraging tools like 529 plans to help them save for their children or grandchildren’s education.
• Business succession planning: Advisor works with business owners to build a financial plan around selling their business or passing it on to heirs.

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.”

Step 2: Understand What a Financial Advisor Is

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.

“Financial advisor” is a broad professional title, while “investment adviser” is a regulated legal category. Investment adviser firms generally register with either the SEC or state securities regulators, and individuals who provide advice on behalf of those firms may be registered as investment adviser representatives (IARs). Whether an advisor registers with the SEC or a state depends on factors including its regulatory assets under management and other eligibility rules.

Regulation Best Interest (Reg BI) also affects how broker-dealers and their representatives may use the titles “adviser” or “advisor.” ¹ A broker-dealer that is not also registered as an investment advisor, or a representative who is not also a supervised person of an investment advisor, generally cannot use those titles in the context of providing investment advice to retail customers without creating a presumed violation of Reg BI’s capacity-disclosure requirement.

What Is a Fiduciary?

Investment advisors owe their clients a fiduciary duty under applicable law. For SEC-registered investment advisors, that federal fiduciary duty applies across the advisory relationship and includes duties of care and loyalty. The specific obligations depend on the scope of services the advisor has agreed to provide.

Broker-dealers operate under a different standard. When making a covered securities recommendation to a retail customer, Regulation Best Interest requires a broker-dealer to act in the customer’s best interest at the time of the recommendation and not place its own financial or other interests ahead of the customer’s. Reg BI includes disclosure, care, conflict-of-interest and compliance obligations.

A financial professional can also be dually registered as both a broker and an investment advisor representative. In that situation, different standards can apply depending on the capacity in which the professional is acting and the service or recommendation being provided. Ask the professional to explain when they are acting as an advisor and when they are acting as a broker.

Working with a fiduciary does not eliminate every potential conflict of interest. Investment advisors can still have conflicts involving compensation, products, affiliations or other business arrangements, which is why reviewing disclosures and asking how conflicts are addressed remains important.

Are you wondering if a financial advisor is worth the cost? You can use this tool to compare your estimated net worth with an advisor versus going it alone.

Common Types of 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:

Investment Managers

These advisors are primarily focused on giving investment advice and managing client portfolios. Investment managers often work for firms that are registered investment advisors, while individual professionals may be investment advisor representatives. Investment advisors generally register with either the SEC or state regulators rather than automatically registering with the SEC. Advisors with at least $100 million in regulatory assets under management may generally be eligible for SEC registration, and those reaching $110 million generally must register with the SEC, subject to applicable rules and exceptions.

Financial Planners

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.

Wealth Managers

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.

Robo-Advisors

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 typically gather information about factors such as your goals, time horizon and risk tolerance and use it to create and manage an investment portfolio.

The amount of human interaction varies considerably by robo-advisor. Some operate primarily through automated tools, while others offer access to investment professionals or hybrid advisory services. Robo-advisors may also offer lower fees or account minimums than some traditional advisory programs, but costs and services vary, so compare both the advisory charge and the expenses of underlying investments.

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.

Step 3: Decide What You’re Willing to Pay for a Financial Advisor’s 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:

AUM-Based Fees

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 recent Kitces.com survey of financial advisors. ² 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.

Fixed Fees

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 Kitces study found.

Hourly Fees

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 Kitces survey found that half of the respondents’ hourly rates were somewhere between $250 and $350.

Retainer Fees

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 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.

Fee-Only vs. Fee-Based Financial Advisors

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.

Wondering whether advisor fees are worth it? This tool lets you model how your net worth could evolve with an advisor versus on your own.

Minimum Investment Amounts

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 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.

Step 4: Find and Research Potential Financial Advisors

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.

Step 5: Vet the Financial Advisors You’re Interested In

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.

Advisor Certifications to Look For

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® professionals receive broad training in financial planning, and CFP Board requires them to act as fiduciaries whenever they provide financial advice to a client. To earn the certification, candidates must satisfy education, examination, experience and ethics requirements. The CFP® exam is a 170-question computer-based test administered in two three-hour sections. The July 2026 exam had a 66% pass rate, while the March 2026 exam had a 67% pass rate. ⁴

Chartered Financial Analyst® (CFA®)

The CFA® designation signals expertise in investment analysis, portfolio management and financial markets. Typically, CFA® charterholders work in investment analysis roles at financial advisor firms, investment firms, insurance companies, banks or investment funds. To earn the charter, candidates must pass all three levels of the CFA Program, complete at least 4,000 hours of qualifying work experience over a minimum of 36 months, provide professional references and become a CFA Institute member. Current 10-year average exam pass rates are approximately 41% for Level I, 45% for Level II and 52% for Level III. ⁵

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.

Potential Red Flags for Financial Advisors and Firms

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.

Fiduciary Duty

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.

Investment Strategies

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

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.

Questions to Ask Potential Advisors

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.

Step 6: Finalizing Your Partnership

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.

What To Do Once You Choose a Financial Advisor

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

1. Sign on the Dotted Line

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.

2. Transfer Your Money

Assuming your advisor will be managing your investments, you’ll need to transfer your money to an account that your advisor can access. If an SEC-registered investment adviser has custody of client funds or securities, the SEC custody rule generally requires those assets to be maintained with a qualified custodian, subject to the rule’s requirements and exceptions.

Qualified custodians can include certain banks, registered broker-dealers, futures commission merchants and qualifying foreign financial institutions. The custodian typically holds the assets, while the advisor receives the authority needed to manage the account according to your advisory agreement.

3. Choose Discretionary vs. Non-Discretionary Investment Management

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.

•  Discretionary management: The advisor will have the authority to make trades and transactions within your account without your explicit consent every time.
•  Non-discretionary management: You’ll have to sign off on individual portfolio transactions beforehand. Some firms may only manage one of these two account types.

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.

4. Have Your Advisor Create a Financial Plan

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.

5. Set Up Future Meetings With Your Advisor

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.

FAQs About Financial Advisors

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:

Top Financial Advisors in Your Area

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. They are ranked according to characteristics like 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