1. Decide what financial advice you need
Start by identifying the financial decisions you want help with. If you are unsure where to start, consider whether you need financial advice. Defining your needs prevents you from paying for services you will not use and helps you find an advisor with relevant experience.
Common reasons to seek financial advice include:
- Creating a financial plan
- Managing investments
- Planning for retirement or retirement income
- Reducing debt and improving cash flow
- Managing an inheritance or other windfall
- Planning around stock compensation
- Preparing to sell a business
- Coordinating tax and estate-planning strategies
- Reviewing insurance needs
Decide whether you want a one-time plan or an ongoing relationship. Someone with a single question may only need hourly or project-based advice, while a person approaching retirement with several accounts may benefit from continuous planning and investment management. Particularly complex needs may require more than one financial advisor.
2. Choose the right type of financial advisor
The right choice among the different types of financial advisors depends on the complexity of your finances, the services you need and how much personal support you want.
Type | Best for | Service |
|---|---|---|
Traditional advisor | Complex or ongoing needs | Personalized planning and investing |
Advice-only planner | A one-time financial plan | Planning without asset management |
Simple, low-cost investing | Automated portfolio management | |
Hybrid advisor | Digital investing with human support | Automated management and professional advice |
Wealth manager | Complex high-net-worth needs | Integrated investment and financial planning |
Broker | Investment transactions | Product recommendations and trades |
The SEC explains that brokers generally provide more transactional services, while investment advisers typically offer ongoing portfolio advice and monitoring. Some firms offer both, so ask which role and standard of conduct will apply to your account.
3. Compare fees and account minimums
Choose a pricing model that matches the amount of help you need. Paying an ongoing percentage may make sense for continuous planning and portfolio management, but an hourly or one-time fee may be more economical for a specific question.
Fee structure | Typical cost | How it works |
|---|---|---|
Assets under management | 0.50%–2.00% a year | A percentage of the portfolio the advisor manages |
Hourly fee | $200–$400 | Payment for the time spent providing advice |
One-time financial plan | Around $3,000 | A set fee for creating a financial plan |
Annual flat fee or retainer | $2,500–$9,200 | Ongoing advice for a fixed annual price |
Robo-advisor | 0.25%–0.50% a year | Automated investment management |
Ask for the total annual cost in both dollars and percentages. For example, a 1% advisory fee on a $500,000 portfolio is $5,000 a year. Fund expenses, trading charges, custody fees and commissions may be additional.
Also check the minimum portfolio or annual fee. An advisor may technically accept your account but still be poor value if their minimum annual charge represents a high percentage of your assets. Our guide to financial advisor costs provides a fuller breakdown.
4. Create a shortlist of financial advisors
Once you know the service and pricing model you want, find two or three advisors who meet those requirements. You can search through:
- A financial advisor matching service
- The SEC's Investment Adviser Public Disclosure database
- FINRA BrokerCheck
- Professional directories, such as the CFP Board or NAPFA
- Recommendations from friends, relatives, accountants or attorneys
- Our comparison of the best financial advisor firms
- Local financial advisory firms
A recommendation can help you find candidates, but it should not replace your own checks. An advisor who suits a friend may have different fees, specialties or account minimums from those you need.
5. Check each advisor's background and qualifications
Verify the advisor independently before meeting them. The SEC says checking whether an investment professional is licensed and registered is one of the most important steps before hiring them.
Use SEC Investment Adviser Public Disclosure and FINRA BrokerCheck to review:
- Current registrations and licenses
- Employment history
- Exams and professional qualifications
- Customer complaints
- Regulatory or disciplinary events
- The firm’s Form ADV and Form CRS
Form CRS summarizes a firm's services, fees, conflicts of interest, standard of conduct and reportable disciplinary history. Form ADV Part 2 provides more detail about an investment adviser's services, fees, business practices and conflicts.
Credentials can indicate training in a particular area, but they are not all equivalent. For example, CFP® professionals complete education, examination, experience and ethics requirements. Check the issuing organization's standards and verify that the credential is current.
Ask every candidate, “Will you act as a fiduciary at all times when advising me?” A clear answer matters because some professionals can act in different capacities at different times.
6. Interview and compare your finalists
Meet two or three advisors before making a decision. Many offer a free initial consultation, which allows both sides to decide whether the relationship is a good fit.
Ask each advisor the same core questions:
- What services are included and excluded?
- Do you regularly work with clients in situations like mine?
- What will I pay each year in total?
- How are you compensated, and what conflicts of interest do you have?
- How will you build an investment strategy around my goals and risk tolerance?
- Who will hold my assets?
- Who will I work with, and how often will we meet?
- How will you measure my progress?
- What happens if I end the relationship?
Compare more than investment performance. The right advisor should explain complex decisions clearly, listen before recommending products and provide a level of contact that suits you.
Our full list of questions to ask a financial advisor explains what you should look for in each answer.
What should you look for when choosing a financial advisor?
Focus on the factors that determine whether the advisor can serve your needs transparently and consistently.
Factor | What you should look for | Red flag |
|---|---|---|
Services | A written scope that covers your needs | Vague promises or missing services |
Experience | Work with clients in situations like yours | Claims to specialize in everything |
Fiduciary duty | A clear commitment to act as a fiduciary at all times | An unclear or conditional answer |
Fees | A complete cost estimate in dollars and percentages | Fees that are difficult to explain |
Conflicts | Specific disclosures and an explanation of how they are managed | A claim that no conflicts exist |
Investment approach | A clear strategy based on your goals and risk tolerance | Products recommended before learning about you |
Communication | A named contact and agreed meeting schedule | No clear point of contact |
Custody | An established third-party custodian and direct account access | Requests to send money directly to the advisor |
Be cautious of guaranteed returns, pressure to make an immediate decision or an advisor who will not provide written disclosures.
What should you check before signing the agreement?
Read the client agreement rather than relying on the conversation alone. Confirm:
- The services included and any work charged separately
- Whether the advisor can trade without asking you first
- The advisory fee and all other costs
- How conflicts of interest are handled
- Which custodian will hold your money
- How often your plan and portfolio will be reviewed
- How either party can end the agreement
- Any termination, transfer or surrender charges
The agreement, Form CRS and Form ADV should be consistent with what the advisor told you. Ask about any differences before signing.
Find the right financial advisor
Choosing the right financial advisor comes down to fit, verification and value. The advisor should offer the services you need, charge transparent fees, have relevant experience and communicate in a way that gives you confidence in your decisions.
Unbiased can match you with an SEC-regulated financial advisor for a free initial consultation. Answer a few questions about your needs, review your match and decide whether you want to proceed.
Frequently asked questions
How do I choose a good financial advisor?
Choose an advisor who regularly works with clients like you and provides the services you need. Ask for the total annual cost in dollars, confirm they will act as a fiduciary at all times and check their regulatory record before signing.
What type of financial advisor should I choose?
For basic investment management, a robo-advisor charging around 0.25%–0.50% may be enough. Consider an hourly advisor at $200–$400 for a specific issue, or a traditional advisor charging around 1% for ongoing investment management and broader planning.
How do you choose a fiduciary financial advisor?
Ask, “Will you act as a fiduciary at all times when advising me?” Get the answer in writing, then use Form ADV Part 2 and Form CRS to check the advisor's fees, conflicts and disciplinary history.
What should be on a financial advisor checklist?
Use an eight-point checklist: services, relevant experience, fiduciary duty, total fees, conflicts, investment approach, communication and account custody. Verify the advisor's Form ADV, Form CRS and disciplinary record before signing.
How do I choose a financial advisor for retirement?
Choose an advisor experienced in Social Security timing, required minimum distributions, tax-efficient withdrawals and sustainable retirement income. Ask them to explain how they would coordinate these decisions for someone in your situation.
How much money should I have before hiring a financial advisor?
You do not need a set amount. Hourly and flat-fee advisors may have no asset minimum, while asset-based advisors commonly require $25,000 to $1 million or more; for example, Schwab Wealth Advisory requires $500,000.
How many financial advisors should I interview?
Interview two or three advisors. Ask each for the same information, including their total annual fee in dollars, services, fiduciary status, experience and meeting frequency.
How do beginners choose a financial advisor?
Beginners should match the service to the task. A robo-advisor charging 0.25%–0.50% may be enough for a basic investment portfolio; for budgeting, debt or a savings plan, consider one or two hours of advice at around $200–$400 per hour instead of an ongoing management fee.
How do I choose a financial advisor near me?
Search by ZIP code through an advisor directory or matching service, then check each candidate through SEC Investment Adviser Public Disclosure or FINRA BrokerCheck. Compare at least two local advisors on fees, experience and fiduciary duty.
What are the red flags when choosing a financial advisor?
Red flags include guaranteed returns, pressure to act quickly, unexplained disciplinary disclosures and an unwillingness to state total fees in dollars. Do not send money directly to an advisor rather than an established third-party custodian.
What is the difference between a financial advisor and a financial planner?
“Financial advisor” is a broad title covering professionals who provide financial guidance, while a financial planner typically creates a plan across areas such as retirement, investing, taxes and estate planning. Check the individual's services and registration rather than relying on the title.
Is choosing a financial advisor worth it?
A financial advisor may be worth it if you need ongoing help coordinating investments, retirement withdrawals and taxes. At a 1% fee, however, a $500,000 portfolio costs $5,000 a year, so compare that cost with an hourly advisor or robo-advisor if your needs are straightforward.