Ratings Methodology for Online Financial Advisors
NerdWallet rates online financial advisors on a scale of 1 to 5 stars, with 5 being the best possible score. The ratings are incremented in tenths of a star — for example, 4.7, 4.8 and so on. Detailed information about how we rate advisors and the factors we consider in our assessments is below.
How our online financial advisor ratings work: Our ratings formula calculates a base rating for each financial advisor overall, from 1.0 to 5.0 stars. The rating is based on core features of the advisor — the factors that matter most to the average investor and directly affect how investors choose an advisor and use their services. Those are:
Advisor access and credentials.
Services offered.
Fees.
Portfolio construction.
Expense ratios.
Account minimum.
Customer support.
How our online financial advisor ratings work: Our ratings formula calculates a base rating for each financial advisor overall, from 1.0 to 5.0 stars. The rating is based on core features of the advisor — the factors that matter most to the average investor and directly affect how investors choose an advisor and use their services. Those are:
We then apply a standard adjustment to the final score to account for factors we consider table stakes offerings. If the financial advisor doesn’t offer these, they do not get an adjustment. For the online financial advisor’s overall score, this standardized adjustment applies if they earn four stars for advisor access and relationship, which requires offering each client a dedicated advisor with no extra fee or additional asset minimum requirement.
Data collection and review process
We collect data from providers and observe provider demonstrations when necessary. Our process starts by sending detailed questionnaires to providers. The questionnaire answers, combined with product demonstrations, interviews of provider personnel and hands-on research by our specialists, make up our proprietary assessment process that scores each provider’s performance across more than 20 factors. The final output produces overall star ratings. Ratings are rounded to the nearest tenth. These overall star ratings appear on roundup pages and the provider’s review.
We then undergo an additional evaluation process to create lists of the best online financial advisors for certain types of consumers. This evaluation adjusts the weighting of factors (and may eliminate or add factors) to emphasize those that matter most to the consumer targeted by the list — for example, our list of the best wealth advisors heavily weighs tax strategy and the number of financial planning services offered. Because of this, a provider’s overall star rating is not always the primary factor that determines inclusion in lists or NerdWallet’s awards program.
Information updates
Factor weightings
The review team
The combined expertise of our investing team is infused into our review process to ensure thoughtful evaluation of products and services from the customer perspective. Our writers and editors together have more than 50 years of experience in writing about finance.
Advisor credentials
Services offered
Fees
Portfolio construction
Expense ratios
Account minimum
Customer support
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