Find a Financial Advisor

Advisors, Investing
find-a-financial-advisor

Financial advisors — also called financial planners — are like doctors for your money: They help you understand complex issues, diagnose potential problems and take preventive steps to plan for the future.

Similarly, choosing the right financial advisor can be as fraught as finding a good doctor. You’re looking for one who has a communication style you’re comfortable with, who knows about the issues that most affect your financial well-being and who fits your insurance plan — or rather, budget.

How to find the best financial advisor for you

One major factor in where you get financial advice is how much you have to invest — an amount that includes your retirement accounts and any money you currently have invested or available to invest. Tell us a little bit about where you stand and we’ll walk you through your options.

Or, read on for some background about the types of financial advisors and the services they provide.

What financial advisors do

We’ll kill the metaphor after this — promise — but like doctors, financial advisors can fall into a wide range of categories. Some function like primary care doctors, offering holistic advice regarding every aspect of your finances. Others are specialists, like registered investment advisors, who manage your investment portfolio and recommend or sell investments.

Most people benefit from the holistic approach. A good financial advisor — preferably a fee-only certified financial planner, who has jumped through education and experience requirements and passed an exam — will help identify and define your goals, then create a plan to reach them. Part of that is helping you decide how to prioritize competing goals, and how to spread your money among those goals. Financial advisors will also monitor your investment portfolio and your financial health, making sure the plan you’ve created still suits your needs and that you’re making progress toward reaching your goals.

As you might imagine, all of the above costs money — many financial advisors charge their fee as a percentage of your assets under management (AUM), typically around 1% (larger account balances frequently receive a lower rate). Because of that, advisors often require that their clients have at least $250,000 in AUM. You’ll generally want to avoid advisors who earn their income via a commission, as unless they are also fiduciaries, they may not always have your best interest at heart.

Sound too rich for you? These days, you have another — and in some cases, better — option: A service called a robo-advisor. These are digital advice companies that manage your investment portfolio and offer financial planning recommendations via computer algorithms, often with little human interaction. They charge lower fees and often require lower balances. Some robo-advisors offer a middle ground, relying mainly on computers but offering clients access to human advisors for additional guidance.

Robo-advisors can’t completely replace financial advisors — if your situation is complex, or you want very personalized planning, you may still want a relationship with a human advisor. But many people will find that robo-advisors are a great low-cost alternative.

Human financial advisors vs. robo-advisors

Human financial advisor
Digital financial advisor
Account minimum
Varies; many advisors require $250,000 in assets or more.$0 to $100,000, depending on service.
Services provided
  • Personalized planning and attention
  • Investment management
  • Goal-setting assistance
  • May offer insurance, tax and estate planning recommendations or guidance
  • Computer-monitored investment management and automatic rebalancing
  • Tax-loss harvesting on taxable accounts
  • Some retirement planning or goal setting recommendations, depending on service
  • May offer phone, email or chat access to human investment advisors (often for additional fee)
  • Investment options
    Customized portfolio may offer larger investment selection, including individual stocksTypically limited to a small selection of low-cost index funds or exchange-traded funds
    Fees
  • Annual management fee: 1% of assets. Larger accounts ($1 million or more) may pay less
  • Investment expenses: Median 0.50%
  • Total fees paid per year: 1.5% of amount managed
  • Annual management fee: 0.25% to 0.50% of assets
  • Investment expenses: Vary by portfolio, but generally average 0.20% or less
  • Total fees paid per year: 0.45% to 0.70% of amount managed

  • I’m just starting out

    Here’s the rub when it comes to financial advisors: Part of their job is to help you build your wealth, but many won’t take on clients who don’t have a certain amount of assets to invest — generally, $250,000 or more. Those who do take clients below that threshold often charge a higher fee for doing so. That’s because advisors frequently set their fee as a percentage of your assets, and low balances don’t pull in enough money.

    That doesn’t mean you’re without options, however. At this stage in your financial life, a robo-advisor is often a good fit. Because robo-advisors use computers to cut out a lot of the overhead involved in financial planning, they’re able to take on smaller account sizes and manage your investments for less than the cost of a human advisor.

    Three we recommend for balances of $25,000 or less are Betterment, Wealthfront and Charles Schwab Intelligent Portfolios.

    bettermentsmall
    Wealthfront
    Account minimum
    $0$500$5,000
    Management fee
    0.25% 0.25%None
    Investment expenses
    0.09% to 0.17%Average 0.12%0.07% to 0.21%
    All-in cost
    0.34% to 0.42%0.37%0.07% to 0.21%
    Annual cost on $25,000 balance
    $85 - $105 $67.50*$17.50 - $52.50
    Why we like it
    Includes in-app text messaging with financial advisors for those who want access to a human.Offers free management of the first $10,000 invested ($15,000 for NerdWallet readers).No management fee means costs are limited to the investment expenses.
    Read our full Betterment reviewRead our full Wealthfront reviewRead our full Charles Schwab Intelligent Portfolios review

    A note on Schwab: While its fees are ostensibly the lowest, investors should also note that it has a required minimum cash allocation — currently 6% — that is higher than that of Wealthfront or Betterment. Because cash returns are typically low, this can reduce a portfolio’s overall yield and act as a kind of defacto fee.

    I’ve built some wealth

    Once you hit the $25,000 to $250,000 range, your financial situation starts to increase in complexity. You may have a range of account types — both tax-advantaged retirement accounts like IRAs and 401(k)s, and taxable investment accounts — and you’re likely planning for a variety of goals.

    Unfortunately, you’re still limited as far as financial advisors go, as many require a balance of $250,000 or more. If you’re set on an advisor, your best shot is one who charges by the hour or by the plan. Check out organizations like the Garrett Planning Network for hourly financial advisors or the National Association of Personal Financial Advisors.

    Robo-advisors are also a good fit at this stage. You may have enough assets to open an account with what we call a hybrid online advice service: These companies use computer algorithms to build and manage your investments, but make human financial advisors available as well. You’re able to consult with those advisors on a regular basis, and they often monitor your portfolio for a bit of additional human oversight.

    As you might expect, you’ll typically pay a bit more for one of these services, though still less in most cases than you’d pay for a direct relationship with an advisor. Here are our picks for both robo-advisors and hybrid services at this asset level.

    Digital robo-advisors
    Hybrid advisors
    bettermentsmall
    Wealthfront
    Vanguard Personal Advisor Services
    Personal Capital
    Account minimum
    $0$500$5,000$25,000$50,000$100,000
    Management fee
    0.25% 0.25%None$0.28%0.30%0.89%
    Investment
    expenses
    0.09% to 0.17%Average 0.12%0.07% to 0.21%0.07% to 0.21%0.05% to 0.19%Average 0.09%
    All-in cost
    0.34% to 0.42%0.37%0.07% to 0.21%0.35% to 0.49%0.35% to 0.49%0.98%
    Annual cost on $100,000 balance
    $340 - $420$345*$70 - $210$350 - $490$350 - $490$980
    Why we like it
    Includes in-app text messaging with financial advisors for those who want access to a human. Offers free management of the first $10,000 invested ($15,000 for NerdWallet readers).No management fee means costs are limited to the investment expenses. Unlimited phone or video calls with certified financial planners.Portfolios are customized on a client-by-client basis.Clients with $200,000 or more get two dedicated financial advisors and customized portfolio.
    Read our full Betterment reviewRead our full Wealthfront reviewRead our full Charles Schwab Intelligent Portfolios reviewRead our full Charles Schwab Intelligent Advisory reviewRead our full Vanguard Personal Advisor Services reviewRead our full Personal Capital review

    I’ve built a nice nest egg and I need help managing it

    At this level of assets, the hard work of amassing that money starts to pay off in the form of choice: It shouldn’t be too difficult to find a financial advisor to work with you when you have $250,000 or more invested. You may also be a good candidate for a digital advice offering like a robo-advisor.

    What you should consider when choosing between the two:

    • The complexity of your financial situation. If you just want investment management, you’ll pay less for it from a robo-advisor. If you want more advanced or personalized services like estate planning advice, goal planning or budgeting assistance, you may want a one-on-one relationship with a financial advisor.
    • The amount of money you have to invest. While $250,000 is a lot of money by any measure, the cost of working with a financial advisor is highest at that balance level — advisors charge a median of 1% of assets under management per year. That fee doesn’t really start to drop until you hit $1 million or more, at which point the median cost is 0.85%. You will likely pay less at a robo-advisor.
    • A middle ground. There are hybrid online advice offerings that cater to this balance level, using computer algorithms to manage portfolios but also providing clients direct access to human financial advisors. These services may be more expensive than a digital robo-advisor, but they’re generally less expensive than a human advisor.
    Digital robo-advisors
    Hybrid advisors
    Human advisors
    bettermentsmall
    Wealthfront
    Vanguard Personal Advisor Services
    Personal Capital
    Certified financial planner
    Account minimum
    $0$500$5,000$25,000$50,000$100,000Often $250,000 or more
    Management fee
    0.25% 0.25%None$0.28%0.30%0.89%1%
    Investment
    expenses
    0.09% to 0.17%Average 0.12%0.07% to 0.21%0.07% to 0.21%0.05% to 0.19%Average 0.09%0.50%
    All-in cost
    0.34% to 0.42%0.37%0.07% to 0.21%0.35% to 0.49%0.35% to 0.49%0.98%1.5%
    Annual cost on $250,000 balance
    $850 -
    $1,050
    $900*$175 - $525$875 - $1,225$875 - $1,225$2,450$3,750
    Annual cost on $500,000 balance
    $1,700 -
    $2,100
    $1,875*$350 - $1,050$1,750 - $2,450$1,750 - $2,450$4,900$7,500
    Why we like it
    Includes in-app text messaging with financial advisors for those who want access to a human touch. Offers free management of the first $10,000 invested ($15,000 for NerdWallet readers).No management fee means costs are limited to the investment expenses. Unlimited phone or video calls with certified financial planners.Portfolios are customized on a client-by-client basis.Clients with $200,000 or more get two dedicated financial advisors and customized portfolio. Offers personalized one-on-one planning; well-suited for clients with complex needs.
    Read our full Betterment reviewRead our full Wealthfront reviewRead our full Charles Schwab Intelligent Portfolios reviewRead our full Charles Schwab Intelligent Advisory reviewRead our full Vanguard Personal Advisor Services reviewRead our full Personal Capital reviewFind a CFP through the National Association of Personal Financial Advisors

    *Wealthfront cost calculations include the company’s free management of $10,000 of account balance (NerdWallet readers get $15,000 in free management).

    Have more questions?

    If you need more information about traditional or digital financial advisors, or you’re still not sure which option is best for you, ask us in the comments below.

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