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Types of Financial Advisors and How to Choose

Andrea Coombes

September 16, 2022

There are more types of financial advisors than pumpkin spice products in October, and that can make it hard to find the best advisor for your own unique needs. Hard, maybe, but not impossible, and look at you, here doing your research. Knowledge is power, friends. You’ve come to the right place

Below is a list of a few types of financial advisors you might come across. This is not a complete list. To keep things simple as you look for the right financial advisor for you, remember that, no matter what title an advisor uses, make sure they are a fee-only fiduciary.


  • Financial advisor: Strangely, this term doesn’t signify much. There are no rules governing who calls themselves a financial advisor. If you happen to walk into your bank or brokerage company, you may get helped by a friendly advisor, but that person’s loyalties could well be to their company first. You’re in second place. For example, if the company has its own investment products, you might get pitched those products rather than equally good, cheaper products from another company. That’s why we talk a lot about finding a fee-only fiduciary advisor, no matter what title the advisor uses.
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  • Wealth manager: Just like it sounds, a wealth manager focuses on managing wealth. Their comprehensive services can include investment management, estate and tax planning, and more. The bad news: If you don’t have a lot of money sitting around waiting to be invested — we’re talking, say, $1 million — there’s a good chance a wealth manager won’t be willing to work with you.
  • Certified Financial Planner: CFPs are like wealth managers for the rest of us. They tend to offer holistic planning, looking at all of your financial goals and coming up with a plan to reach those goals. Many CFPs charge by the hour or by the service — that means they don’t mind if you don’t (yet) have $1 million to invest. CFPs act as fiduciaries, which means they put your best interests front and center. That’s a very good thing. However, you still need to interview CFP advisors to find the best advisor for you. (We’ve even got a script for you here.)
  • Broker-dealer: Broker-dealers buy and sell investments. This is important work, but it can become problematic if you’re seeking investment advice. A broker-dealer’s goal is often to sell investments rather than assessing your overall financial needs and finding the best investment for your situation. While broker-dealers now must abide by a rule to act, to some degree and some of the time, in clients’ best interests, they aren’t fiduciaries. If you want help deciding how to invest, find a fiduciary advisor.
  • Registered Investment Advisor (RIA): The “R” in “RIA” stands for “registered,” as in on file with the SEC and/or a state agency. The good news: Getting advice from an advisor at an RIA firm is generally a good thing because they are legally required to act as fiduciaries — that means they must serve your best interests. The bad news: Some RIAs are dually registered as both RIAs and brokers, which means that when those advisors meet with you they could switch back and forth between fiduciary and not-fiduciary, like some kind of sci-fi alien brain-meld situation. Be wary of RIAs that are also brokers.
  • Automated robo-advisor: So you know you need to invest for your future, but the thought of figuring out how to actually get your money into the stock market makes you freeze up? You’re not alone, and that’s exactly what a robo-advisor can help you with. These companies generally are RIAs — thus, fiduciaries — who’ve embraced the idea of passive investing for the masses. In plain English: They’ve come up with a handful of investment portfolios that can help you build wealth, and the management fee tends to be low (often about 0.25% of the money you invest). You’ll answer a handful of questions online; based on your responses the robo-advisor picks an investment portfolio for you. You’ll need to do some digging to find the best robo-advisor for your situation. For example, some offer access to live advisors; some don’t. Some of the biggest names are SoFi, Wealthfront and Betterment, but many big brokers also offer a robo option, including Charles Schwab, Vanguard and Fidelity.
  • Financial coach: A financial coach can help you manage debt, improve credit and create a budget so you know where your money is going every month. These can be hugely helpful tasks to get done before shelling out the bigger bucks for a financial advisor. Keep in mind that, similar to the way anyone can call themselves a financial advisor, there’s no required training to become a financial coach. That said, the Association for Financial Counseling and Planning Education (AFCPE) offers the Accredited Financial Counselor (AFC) certification, so if you work with an AFC-designated coach, you know they’ve committed to ongoing education and to being a fiduciary.
  • Consumer credit counselor: A consumer credit counseling agency can be a great resource for help dealing with credit and debt challenges as well as day-to-day money management. Be wary of for-profit companies that promise credit repair for a price. Stick with nonprofit agencies.
Be wary of for-profit companies that promise credit repair for a price. Stick with nonprofit agencies.

How to choose a financial advisor

How do you choose which advisor is right for you? The first thing to do is to figure out what your goals are. You’ll need at least some sense of what you’re hoping to do, so that you can find the best advisor for your situation.

Here’s a guide to jump-start your thinking, and below the guide are links for finding each type of advisor.

I need help with... ...then consider going with:
Planning for future financial goals
  • Certified Financial Planner
  • Registered Investment Advisor
  • Financial coach
Managing debt
  • Financial coach
  • Consumer credit counselor
Investing for retirement
  • Registered Investment Advisor
  • Robo-advisor
  • Certified Financial Planner
Managing finances as I build my small business or startup
  • Certified Financial Planner
  • Registered Investment Advisor
Saving for the future
  • Certified Financial Planner
  • Registered Investment Advisor
  • Financial coach
Coming up with a plan to pay off my debt
  • Consumer credit counselor
  • Financial coach
Improving or building my credit
  • Consumer credit counselor
  • Financial coach
Creating an estate plan
  • Certified Financial Planner
  • Registered Investment Advisor
  • Attorney

Where to find a financial advisor

Here are some ways to find the experts above:

Certified Financial Planner:

Registered Investment Advisor:

Financial coach:

Consumer credit counselor:

Glossary of certifications

There are hundreds of professional designations that financial advisors might have. Below is a handful of the certifications that we feel are among the most robust and valuable. To search for certifications not listed above, check out Finra’s helpful tool.

Certification What it stands for General area of expertise Organization that offers it
CFP Certified Financial Planner Holistic financial planning CFP Board
CFA Chartered Financial Analyst Investment management CFA Institute
CPA Certified Public Accountant Tax planning Association of International Certified Professional Accountants
PFS Personal Financial Specialist Holistic financial planning combined with tax planning (all PFS holders also have a CPA) Association of International Certified Professional Accountants
EA Enrolled Agent Tax planning National Association of Enrolled Agents

Next steps

Got questions about working with a financial advisor? We’ve got answers! Explore our complete course:




About the author

Andrea Coombes has 20+ years of experience helping people reach their financial goals. Her personal finance articles have appeared in the Wall Street Journal, USA Today, MarketWatch, Forbes, and other publications, and she's shared her expertise on CBS, NPR, “Marketplace,” and more. She’s been a financial coach and certified consumer credit counselor, and is working on becoming a Certified Financial Planner. She knows that owning pets isn’t necessarily the best financial decision; her dog and two cats would argue this point. Read more about Andrea.

About the editor

Carolyn Kimball is Managing Editor for Reink Media Group and the lead editor for content on investor.com. Carolyn has more than 20 years of writing and editing experience at major media outlets including NerdWallet, the Los Angeles Times and the San Jose Mercury News. She specializes in coverage of personal financial products and services, wielding her editing skills to clarify complex (some might say befuddling) topics to help consumers make informed decisions about their money. Read more about Carolyn.

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