What makes a good personal adviser

We collect data directly from providers, and conduct first-hand testing and observation through provider demonstrations. Our process starts by sending detailed questionnaires to providers to complete. The questionnaires are structured to equally elicit both favorable and unfavorable responses from providers. They are not designed or prepared to produce any predetermined results. The final output produces star ratings from poor one star to excellent five stars.

Ratings are rounded to the nearest half-star. Evaluations vary by provider type, but in each case are based upon the weighted averages of factors that include but are not limited to: advisory and account fees, account minimums and types, investment selection, investment expense ratios, trading costs, access to human financial advisors, educational resources and tools, rebalancing and tax minimization options, and customer support including branch access, user-facing technology and mobile platforms.

Each factor can involve evaluating various sub-factors. The factors considered, and how those factors are weighted, change depending upon the category of providers reviewed. Writers and editors conduct our broker and robo-advisor reviews on an annual basis but continually make updates throughout the year. We maintain frequent contact with providers and highlight any changes in offerings. The review team comprises seasoned writers, researchers and editors who cover stocks, bonds, mutual funds, index funds, exchange-traded funds, alternative investments, socially responsible investing, financial advisors, retirement and investment strategy on a daily basis.

Finance and other national and regional media outlets. The combined expertise of our Investing team is infused into our review process to ensure thoughtful evaluations of provider products and services from the customer perspective. Our writers and editors combine to have more than 70 years of deep experience in finance, ranging from a former Wall Street Journal reporter to a former senior financial advisor at Merrill Lynch.

While NerdWallet does have partnerships with many of the reviewed providers, we manage potential conflicts of interest by maintaining a wall between our content and business operations. This wall is designed to prevent our writers and the review process from being influenced or impacted by our business partnerships.

This way, all reviews can provide an unbiased review that serves the interests of our users. A financial advisor helps people manage their investments, plan for retirement and save money for their financial goals. Financial advisors come in many varieties, from in-person advisors to online financial services and robo-advisors. They all serve the same purpose: to help you figure out what to do with your money. If you find taking care of your finances and planning for the future to be overwhelming, a financial advisor can certainly help.

If you feel confident investing your money, you may not need one. If you recently had a big life change you got married, had a child, lost a family member , it can be helpful to work with a financial advisor to help you understand your new financial landscape.

There are a few robo-advisors — digital investment management services — that charge no management fees. Others charge around 0. Then, there are online planning services and traditional in-person financial advisors. Online planning services typically charge a management fee that starts at around 0.

We have a full overview of financial advisor fees here. Financial advisors are a larger category of individuals who help people manage their finances. It is important when you are looking for a financial advisor to thoroughly vet them , no matter what they call themselves.

What you look for in a financial advisor will have to do with your needs and priorities. Online advisors are for the most part less expensive, but some people prefer to meet with a local advisor; a face they can come to know and trust. It might also depend on what you want your advisor to do. Learn more about how to choose a financial advisor. What sort of service you choose to take care of your money is a matter of your needs and comfort level.

In-person advisors have the advantage of being able to develop a relationship with you over time. They might know more about your family, your job and your life in general — thus giving them better insight into your financial needs.

Robo-advisors are a great choice if you only want investment management. If you need more comprehensive financial planning, many online planning services offer dedicated advisors who can give you customized help with a lower price tag than in-person advisors. As your assets grow and become more complicated — maybe you own a house, have an investment portfolio and are trying to pay off debt — it can be worthwhile to seek help from either a traditional or online advisor. We recommend working with financial advisors who are fee-only fiduciaries.

That may require a face-to-face conversation with a human financial advisor or planner. And these professionals usually go beyond just building portfolios. They offer a wide range of services to help achieve your goals, such as helping create a budget and plan to save for a home or selecting the right college savings plan for your family or even creating tax efficiencies with your investments.

Generally, brokers are registered with the Securities and Exchange Commission and overseen by the Financial Industry Regulatory Authority , a self-regulatory agency for the financial industry. Brokers are allowed to buy and sell stocks, bonds, mutual funds, annuities and other investment products on behalf of their clients.

Traditionally, brokers were considered sales personnel under the law and only needed to recommend investments that were suitable for you, even in cases where better options existed.

Under rules rolled out by the SEC over the summer , these professionals must now act in your best interest when working with your money. But some consumer advocates claim that the new rules are weak and don't go far enough to eliminate conflicts of interest that can arise, such as accepting payments for recommending specific products. But financial professionals can also be registered as an investment advisor and, in that role, are overseen by the SEC and state securities agencies.

Investment advisors can manage investment portfolios — including buying and selling stocks and funds — and provide advice on your investments. Under SEC rules, these professionals need to act as a fiduciary, which means they must put your interests ahead of their own and eliminate conflicts of interest as much as possible.

Here's where it gets tricky : No one really uses these terms on their business cards. Because that would be too easy, right? Financial professionals these days go by a lot of titles: financial advisor, financial planner, money manager, wealth manager, etc.

And many are registered as both brokers and investment advisors. If you're looking for someone who will provide holistic financial advice, experts usually suggest you work with a certified financial planner. Those with a CFP designation have a bachelor's degree and have passed a rigorous exam to verify that they understand all of the core aspects of financial planning.

Typically, financial planners are registered as investment advisors and need to adhere to a fiduciary standard. Plus, under the new rules that went into effect in October , all those with a CFP must act in the best interests of investors.

It can be easy to simply walk into your bank, or stop in at the local Charles Schwab office with the plan of finding a financial professional to work with. And while those can be good options, you should still do some research and gather a robust list of candidates from a variety of sources.

Many times, there are unaffiliated financial professionals who may better suit your needs, even if that means adding another financial firm to your roster. You might be using an unsupported or outdated browser. To get the best possible experience please use the latest version of Chrome, Firefox, Safari, or Microsoft Edge to view this website. Do you need help managing your money? Finding a good financial advisor can help you avoid these costs and focus on goals.

Follow these steps to find the right financial advisor for your needs. Before you speak to a financial advisor, decide which aspects of your financial life you need help with. Keep in mind that financial advisors provide more than just investment advice. The best financial planner is the one who can help you chart a course for all your financial needs.

This can cover investment advice for retirement plans , debt repayment, insurance product suggestions to protect yourself and your family, and estate planning. Depending on where you are in life, you may not need comprehensive financial planning. People whose financial lives are relatively straightforward, like young people without families of their own or significant debt, might only need help with retirement planning. People with complex financial needs, however, may need extra assistance.

They could be looking to establish college funds or trusts for their children, navigate aggressive debt payment situations or solve tricky tax problems. Not all types of financial advisors offer the same menu of services, so decide which services you need and let this guide your search. While many people call themselves financial advisors, not all have your best interest at heart.

Part of learning about the different types of advisors is understanding fiduciary duty. Some, but not all, financial advisors are bound by fiduciary duty, meaning that they are legally required to work in your financial best interest. Regardless of which kind of advisor you choose, you should make sure you know how they earn money. This helps you determine if their recommendations are actually better for you—or for their wallets.

Fee-only financial advisors earn money from the fees you pay for their services. These fees may be charged as a percentage of the assets they manage for you, as an hourly rate, or as a flat rate. Almost all fee-only advisors are fiduciaries.

Generally speaking, they have chosen to work under a fee-only model to reduce any potential conflicts of interest. Some financial advisors make money by earning sales commissions from third parties. It's also good for those just starting out, because robo-advisors often have low or no account minimums. If you have a complicated financial situation or want holistic advice on topics like estate planning, insurance needs, etc.

If you don't mind meeting with your advisor virtually, you may save money with an online service. These services also typically have lower account minimum requirements than a human advisor might.

You'll also want to think about what each service can offer you. For example, if you're interested in impact investing , you'll want to ensure your advisor, no matter what kind they are, can help you with that. It often makes sense to start with a robo-advisor or online planning service — you can always hire a traditional financial advisor if your situation grows more complex. Financial advisors have a reputation for being costly, but these days there is an option for every budget.

It's important to understand how much a financial advisor costs before you commit to services. Generally speaking, there are three cost levels you're likely to encounter:. Robo-advisors often charge an annual fee that is a percentage of your account balance with the service. Robo-advisor fees frequently start at 0.

Online financial planning services typically charge either a flat subscription fee, a percentage of your assets or both. For example, Personal Capital charges 0. Both fees include portfolio management and financial planning. Others may charge a flat fee, an hourly rate or a retainer. Always check out the record of the company or person you're considering by looking up the firm's Form ADV. Among other things, this form will outline how the firm or advisor charges for its service and what the specific fees are , conflicts of interest and any past disciplinary actions.

We also have a list of 10 questions you should ask a financial advisor — including whether they hold to a fiduciary standard, which requires that they act in your best interest. Financial advisors perform many services, though for the most part they help clients manage their money.

Financial advisors can help you cut expenses, pay down debt and prioritize your goals. Some financial advisors have additional certifications or expertise that allow them to help with estate planning, insurance needs or tax preparation. Maybe your salary has increased or you inherited some money from a relative. How much you should spend on a financial advisor depends on your budget, assets and the level of financial guidance you need.