What is a financial advisor?

A financial advisor is a professional who helps people manage money, invest, plan for retirement and navigate major financial decisions. The title itself is not regulated — check for the CFP credential and fiduciary status before hiring anyone.

Section 01

Types of financial advisor

RIA (registered investment adviser): regulated by the SEC or a state, held to a fiduciary standard. Broker-dealer: regulated by FINRA, held to a suitability standard.

Section 02

How financial advisors get paid

Fee-only advisors are paid by you: a flat fee, an hourly rate or a percentage of assets. Fee-based advisors take fees plus commissions from product sales.

Section 03

FAQ

What does a financial advisor do?

Key takeaway

A financial advisor assesses your situation, sets goals with you, recommends strategies for saving, investing, insurance and tax planning, then monitors progress over time.

Is a financial advisor worth it?

For simple finances a one-time plan is usually enough. For a business sale, inheritance, estate planning or retirement income sequencing, ongoing advice normally pays for itself.

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

A broker executes trades under a suitability standard. A registered investment adviser is a fiduciary and must put your interests first.

What credentials should a financial advisor have?

Key takeaway

CFP is the benchmark for planning. CFA signals investment analysis depth and CPA/PFS signals tax expertise.

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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.

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