Financial advisor: what they do, what they charge and how to find the right one

A financial advisor helps you build a plan for investing, retirement, taxes and major life decisions. Fee-only fiduciary advisors are paid directly by you, not by commissions — that distinction matters more than any credential on the business card.

Section 01

What a financial advisor actually does

A financial advisor reviews your full picture — income, debts, goals, timeline — and builds a plan around it. The work ranges from a one-time financial plan to ongoing investment management with annual reviews.

The credential that matters most is CFP (Certified Financial Planner). Require it, or have a clear reason to waive it.

Section 02

Fee structures explained

Key takeaway

Fee-only advisors charge a flat fee, an hourly rate or a percentage of assets (AUM), typically 0.5%–1% a year, and receive no commissions. Fee-based advisors charge fees and earn commissions — a different incentive structure.

A $500k portfolio at 1% AUM costs $5,000 a year. At 0.5% it is $2,500.

  • Flat fee: $1,000–$5,000 for a one-time financial plan
  • Hourly: $200–$400 an hour for specific questions
  • AUM: 0.5%–1% a year for ongoing management
  • Commission: paid by the product provider, not you — creates conflicts
Section 03

When you need one and when you don't

You probably don't need full-service management if your finances are straightforward: one employer, no business income, simple investments in a target-date fund. A one-time plan for $500–$1,500 gives you the roadmap without the ongoing cost.

Key takeaway

You likely do need one at the big forks: first serious investment decisions, a business sale or equity event, an inheritance, a divorce, or retirement income planning where the withdrawal sequence decides how long the money lasts.

Next step · Free

Get matched with a vetted fiduciary advisor

Answer a few questions and compare fee-only advisors who work with situations like yours.

Get matched with an advisor

Takes about 2 minutes · No obligation

Section 01

How to vet a financial advisor before you hire

  • Check FINRA BrokerCheck and the SEC Investment Adviser Public Disclosure for complaints
  • Ask directly: are you a fiduciary at all times — not just sometimes?
  • Request a sample financial plan for a client in a similar situation
  • Read the ADV Part 2: it lists every fee and conflict in plain language
  • Interview at least two advisors before you sign anything
Section 02

FAQ

What is the difference between a financial advisor and a financial planner?

The terms are used interchangeably. 'Financial planner' usually implies a comprehensive approach across budgeting, saving, insurance and investing.

How much does a financial advisor cost?

A one-time financial plan runs $1,000–$5,000. Ongoing management costs 0.5%–1% of assets a year.

What is a fiduciary financial advisor?

Key takeaway

A fiduciary is legally required to act in your interest, not the firm's. Fee-only registered investment advisers are fiduciaries.

How do I find a financial advisor near me?

NAPFA lists fee-only fiduciary advisors by ZIP code and the CFP Board lets you search certified planners by location. Interview at least two, and compare their fee schedules side by side.

Do I need a financial advisor to invest?

No. Low-cost index funds cover most long-term investing.

Next step · Free

Get matched with a vetted fiduciary advisor

Answer a few questions and compare fee-only advisors who work with situations like yours.

Get matched with an advisor

Takes about 2 minutes · No obligation

What the retirement calculator can estimate

A retirement savings calculator projects how current savings and future contributions might grow under a chosen return assumption. It can also estimate a potential retirement balance or test how long a balance may support planned withdrawals. Because actual investment returns vary, compare several scenarios instead of treating one result as certain. Include workplace accounts such as a 401k, individual accounts, taxable investments, and any pension benefits that apply.

Effective retirement planning also considers inflation, taxes, health expenses, debt, and the timing of Social Security or pension income. Full retirement age is a Social Security term and is not necessarily the age when someone must stop working. An annuity may create a contractual income stream, but fees, guarantees, liquidity restrictions, and insurer claims-paying ability depend on the specific product. Review assumptions regularly as income and expenses change.

Common questions

People also search for

Part of the Money & Debt (incl. Student Loans) cluster.

Get matched with a vetted fiduciary advisor

Start