How to choose a financial advisor
So, you’ve decided you need help managing your financial life. Now what?
The good news: You have a lot of options for obtaining financial advice. The bad news: You have a lot of options for obtaining financial advice. With so many choices, it's important to make an informed decision when determining the financial advice that's right for you.
What's a financial advisor?
A financial advisor is a person or digital-based program that helps you manage—or in some cases, completely manages—your finances.
Financial advice can help you reach your goals by assisting with investment management, creating a budget, or offering tax help. With various services to choose from, selecting an advisor can feel overwhelming. But learning more can help you narrow your options and feel more confident about your selection.
If you want your advisor to be able to buy and sell securities and execute transactions on your behalf, you'll need to give them discretionary control over your account. If you want to control trading decisions, then you'll want a nondiscretionary account.
Fee-only advisors are compensated directly by their clients for their services. Typically, fee-only advisors charge on an hourly basis, a flat fee per plan, or a retainer, but some offer subscription payment models.
Fee-based advisors charge a fee based on the percentage of assets managed on behalf of the client. These fees generally range from 0.25% of assets (i.e., $250 on a $100,000 investment) to 1.5% or more (i.e., $1,500 on a $100,000 investment). Advisor compensation will vary. Some advisors are salaried, while others may be compensated as a percentage of the assets managed.
Knowledge is power
You've worked hard for your money, so it's important to do your research before choosing a financial advisor. The more you know, the better equipped you'll be to select advice to help you meet your goals and secure your financial future. Advice that's right for you.
Ready to start your search for a financial advisor with Vanguard?
All investing is subject to risk, including the possible loss of the money you invest.
Diversification does not ensure a profit or protect against a loss.
You must buy and sell Vanguard ETF Shares through Vanguard Brokerage Services (we offer them commission-free) or through another broker (which may charge commissions). See the Vanguard Brokerage Services commission and fee schedules for full details. Vanguard ETF Shares are not redeemable directly with the issuing fund other than in very large aggregations worth millions of dollars. ETFs are subject to market volatility. When buying or selling an ETF, you will pay or receive the current market price, which may be more or less than net asset value.
Advice services are provided by Vanguard Advisers, Inc., a registered investment advisor, or by Vanguard National Trust Company, a federally chartered, limited-purpose trust company.
Certified Financial Planner Board of Standards Inc. owns the certification marks CFP® and Certified Financial Planner™ in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.