Ranking traditional full-service financial advisors is much harder than, say, picking out the best brokerage firms. There are many thousands of advisors, all with different qualifications and clientele.
In this article, I’ll point you toward the “best financial advisor” lists that the wasabisushigrill.com team respects. I’ll also explain the type of financial advisor that 耀竣金融配资_在线配资炒股:money expert Clark Howard recommends (hint: a fee-only fiduciary) and give you some resources to help you find one.
Table of Contents
- 耀竣金融配资_在线配资炒股:What Is a Financial Advisor?
- Trustworthy “Best Financial Advisors” Lists
- How To Find the Best Financial Advisor for You
- Resources You Can Use To Find Fiduciary Financial Advisors
- 耀竣金融配资_在线配资炒股:What Are These Other Advisor Models?
- Clark-Approved Alternatives to Full-Service Financial Advisors
What Is a Financial Advisor?
If you’re searching for “best financial advisors,” you may already understand what you’re looking for. In case you don’t, a traditional, full-service financial advisor is someone who helps you manage your money and assists with financial planning. Before creating a financial roadmap that’s specific to you, a good financial advisor will learn more about:- Where you are now (debts, assets)
- Where you want to go (goals)
- Your personal circumstances (family, career)
But if you’re going to pay the industry-standard 1% annual fee to hire a full-service financial advisor, he or she should offer services well beyond investing help such as:
- Retirement planning
- Tax planning
- Estate planning
- Long-term health care
- Charitable giving
- Insurance strategy
- Debt management
- College savings
Trustworthy “Best Financial Advisors” Lists
The financial advisor industry can be lucrative — not just for the advisors but also for the publications that write about them. It makes sense: The live advisor industry deals with large sums of money. So some of the lists you may find when you search for the best financial advisors are “pay to play.”- Phone interview
- In-person interview
- Lengthy questionnaire
- Investigation of formal complaints or lawsuits
- Research into charitable giving and firm staff diversity
How To Find the Best Financial Advisor for You
Hiring a good financial advisor can be one of the more difficult choices in personal finance. However, if you’re willing to work at it, your research can be time well spent. Here’s a simplified step-by-step guide to finding, vetting and hiring a financial advisor.1. Make Sure You Need a Financial Advisor
If you’re not looking for advice outside of investing, you probably don’t need to pay a 1% annual fee for a financial advisor. The same is true if you’re decades away from retirement, Clark says.2. Familiarize Yourself With the Term “Fee-Only Fiduciary”
If you do need a financial advisor, it’s important that you hire someone who is:- Legally obligated to put your financial interests above their own. This is called “.”
- Not financially incentivized to sell you certain investment products. Advisors who make money based only on what you pay them are “fee-only,” and that’s what you’re looking for. (Some advisors make commission or fees off the products they sell you.)
Clark is adamant that you should work only with 耀竣金融配资_在线配资炒股:fee-only fiduciaries.
3. Narrow Your Search With Clark-Approved Resources
Outside of the lists from Forbes and Barron’s, there are other great resources to help you locate fiduciary financial advisors near you.
You can also ask friends and family for recommendations, but you need to vet the candidates personally.4. Interview Your Financial Advisor Candidate
Some have described advisors as the Chief Financial Officer of your family. This person will play an important role in your life, and it’s important to go through an interview process of sorts. Among other things, you want to:- Confirm the person is a fee-only fiduciary
- Understand the services they provide
- Understand their investment philosophy
If you want to read more about questions you should consider asking your candidate, go to this article I wrote about that subject recently.
Resources You Can Use To Find Fiduciary Financial Advisors
Perhaps you’ve decided you want to hire a fee-only fiduciary. If you’re not interested in hiring anyone from the Forbes or Barron’s lists, or if you want more options, there are several Clark-approved resources that you can use.- : This has been Clark’s go-to recommendation for years. The financial advisors within the Garrett Planning Network are all fee-only fiduciaries who charge hourly rates. They can help with comprehensive financial planning or advise you on specific topics such as budgeting, portfolio analysis or college savings.
- : NAPFA is similar to Garrett in that its advisors are fee-only fiduciaries. NAPFA’s advisors are more for long-term relationships rather than short-term consultations. However, NAPFA financial advisors may require an investment of $500,000 or more in order to work with you.
- : You’ll answer a number of questions about your net worth, timeline and priorities. Based on your answers, SmartAsset matches you with up to three fiduciary financial advisors or firms. If you have less than $100,000 to invest, it typically matches you with firms that charge a flat amount per month rather than an annual fee. Make sure you calculate the annual rate as a percentage of your assets to make sure you’re not paying well more than the industry standard of approximately 1% per year.
What Are These Other Advisor Models?
As I mentioned at the beginning of this story, a search for “best financial advisor” will include results for robo-advisors and online-only hybrid financial advisors. While these models can be great solutions, their products and services are not the same as you’ll find if you hire a full-service financial advisor.A robo-advisor is best for people who are looking only for investment advice. Most robo-advisors charge an annual fee of between 0.25% and 0.40%. Robo-advisor algorithms match you with one of several prebuilt portfolios based on your time horizon and risk tolerance. You then make contributions to your robo-advisor over time, which it automatically invests into your portfolio. Robo-advisor portfolios normally lean heavily on and .
A hybrid financial advisor is best for people who want occasional advice from a professional but are OK with some level of independence in exchange for cheaper annual fees. This model handles your investing through a robo-advisor. However, you also get ongoing access to full-service financial advisors, typically through scheduled phone or video calls.
Sometimes the human advisors at hybrids help shape or customize your portfolio before you get started even though you’ll be investing in an automated, pre-built portfolio. These advisors can provide most or all of the same services as a full-service financial advisor. However, you probably won’t have a long-term or personal relationship with them, and you may end up talking to a different advisor every time. The depth and personalization of the financial services the hybrid model offers beyond investing won’t reach the same level as the services of a full-service financial advisor. Hybrid models tend to charge annual fees between 0.30% and 0.89%.Clark-Approved Alternatives to Full-Service Financial Advisors
If you’re thinking about hiring one of the best financial advisors but you’re not sure about the traditional, full-service approach, there are three alternatives for you to consider (and the companies Clark likes for each).1. 耀竣金融配资_在线配资炒股:Invest on your own. Clark recommends investing in 耀竣金融配资_在线配资炒股:a target date fund or in low-cost index funds. He likes Fidelity, Schwab and Vanguard.
2. 耀竣金融配资_在线配资炒股:Invest via a robo-advisor. wasabisushigrill.com’s two favorites are 耀竣金融配资_在线配资炒股:Betterment and 耀竣金融配资_在线配资炒股:Wealthfront.
3. Invest through a hybrid robo-advisor. Clark is a big fan of Vanguard’s Personal Advisor Services and .
