Ratings Methodology for Financial Advisors by City

Data collection and review process

Every advisor profile starts with Form ADV — the paperwork registered investment advisors have to file with the SEC or state regulators. It comes in three parts. Parts 1 and 2 are especially useful, though neither part on its own tells the whole story.

Part 1 of the ADV tells us where a firm is headquartered, how big it is, how many clients it has, how much money it manages, whether it's had any legal or disciplinary issues and other factors. This helps us understand whether an advisor is even a real, viable option.

Part 2, often called the brochure, is more of a narrative. It's where an advisor explains their investment philosophy, their background, and how they charge for their services. This is where the real answer to "what would this actually cost me?" is hiding, and that's usually the question people care a lot about but find hardest to get an answer on.

With help from AI, we pull both piles of data together and pull out a giant set of data points for every advisor. But we don't stop there; we also do math. For example, we calculate a blended fee for advisors with tiered pricing, because a fee schedule with five different tiers isn't that useful if you have to a lot of math on your own just to compare a few advisors. We wanted to actually understand what potential clients are getting into.

From there, we filter the data and score advisors against a weighted rubric. We match each advisor to a designated market area (DMA) using the zip code of the main office they report to the SEC so that people can see advisors in their area. Within these markets, we fact-check and highlight the high-scoring advisors.

Factor weightings

We look at a variety of things, such as firm size and assets under management, who an advisor serves and what they offer, their fees and account minimums, any specialized services like tax prep or estate planning and their legal or disciplinary history. The stuff that affects cost and fit the most carries more weight because that's usually what makes or breaks whether an advisor is actually a realistic choice for someone, versus just a nice option on paper.

The review team

Our rankings are put together by a team that builds and maintains the scoring rubric, gathers the data and fact-checks claims.

The team is made up of experienced writers, researchers and editors who cover investing, financial advisors, retirement and investment strategy. Beyond NerdWallet, their work has run in The New York Times, The Washington Post, Forbes, USA Today, Bloomberg News, Nasdaq, MSN, MarketWatch, Yahoo Finance and other outlets. Every writer and editor follows NerdWallet's editorial integrity guidelines.

The whole team's experience feeds into how we evaluate advisors, so we're always looking at things from the customer's point of view. Altogether, our writers and editors have more than 50 years of experience writing about finance.