Advisor vs. Adviser: Is There a Difference?

An advisor (or adviser) is a person who gives advice. In the world of finance, there is some confusion about which spelling to use when referencing one. Thankfully, they’re both correct. In everyday language, an advisor with an “o” and an adviser with an “e” are essentially the same thing. But there is a reason you might see both terms.

Advisor or adviser?

The U.S. Investment Advisers Act of 1940 spells out what an investment advisor is and requires them to register with a governing body. It uses the spelling “adviser” with an “e.” Some professionals prefer to stick with “adviser” because it reflects the official language. Others like to spell it “advisor,” which is the more common form of the word in American English.

The spelling your finance professional uses means little. It doesn't indicate their level of expertise or qualifications. Instead, an advisor’s credentials and the kind of financial advice they give is what matters. And it's up to you to vet them.

How to vet a financial advisor or adviser

Anyone who gives investment advice must register with the U.S. Securities and Exchange Commission or their state. You should always verify a potential advisor’s registration status and any other certification they hold. You can use the Financial Industry Regulatory Authority’s BrokerCheck tool to verify that an investment advisor is registered. That tool offers information on both SEC- and state-registered investment advisors.

You can use an individual licensing board's website to verify an advisor holds a specialized certification. For example, to verify a certified financial planner, you can use the tool on the CFP Board’s website.

What do advisors do?

Financial advisors can invest your money, help you make a financial plan, and answer your financial questions. Making financial decisions can be stressful and emotional. A good advisor should be able to help you see your choices clearly.

For example, let's say an advisor has a client who's in her 30s and has a 401(k) through her employer. The advisor would review her financial information, determine her risk tolerance and discuss her goals. Then, the advisor might make recommendations that cover:

• How much she should contribute to her 401(k).

• How other retirement accounts, like an IRA, might factor into her plan.

• What investments she should choose. 

The advisor might then manage those investments across all of her accounts. Alongside that, the advisor can offer a complete financial plan to help her reach her other goals. That may include guidance on how to save for a home down payment, how much house she can actually afford and what kind of insurance coverage she needs.

There are several kinds of advisors, but NerdWallet recommends working with CFPs. Advisors who have earned the CFP designation have several years of experience and are held to a fiduciary standard. That means they are obligated to act in their client’s best interest.

» Want to know more? Learn how to choose a financial advisor

Do I need an advisor?

Whether you need a financial advisor depends on your situation and your goals. Generally, the more complex your financial situation is, the more likely it is you’ll benefit from speaking with an advisor.

Common reasons for needing an advisor include:

• You struggle with managing your money or saving enough to meet your goals. 

• You've recently experienced a major life event, such as receiving an inheritance or getting married. 

• You are saving for multiple long-term goals.

• You have new income sources, such as equity compensation.

Financial advisors come at a range of price points, depending on the services you’re looking for. If you want to work with an advisor, start by determining what kind of advice you’re looking for and compare costs.

» See our picks for the best financial advisors

You could consider a robo-advisor if your situation isn’t complicated but you want investment help. A robo-advisor uses a computer algorithm to choose and manage your investments. It takes into account your risk tolerance and other financial details. And it generally comes with a smaller price tag.