Frequently Asked Questions

• How do I become a financial advisor?

  You'll need a bachelor's degree to become a financial advisor, preferably in finance, accounting, statistics, or business management. After school seek out an internship and consider what certifications you might want to pursue. There is no certification to become a financial advisor, but there is to become a certified financial planner. To get that you'll need to complete coursework on financial planning through a CFP Board Registered Program, have a bachelor's degree, and take the CFP exam. To become an independent financial advisor, you'll need to register a firm with the SEC as a registered investment advisor and yourself as an investment advisor representative.

  Learn More: Is a Career in Financial Planning in Your Future?
• How much does a financial advisor cost?

  Fee rates and overall costs differ from financial advisor to advisor. There are five different fee structures: Fixed-rate, commission, hourly, or performance-based fees. Financial advisors may rely on one or more of these, but the most common fee structure is based on a percentage of assets under management (AUM). According to AdvisoryHQ, the average financial advisor fee in 2021 was 1.02% of AUM. That means for an account with $1 million AUM, the fee would add up to $10,200 annually.

  Learn More: What You Need to Kno♔🅘w About Fee-Only Financial Advisors
• Do I need a financial advisor?

  You can likely manage your finances without an FA. But financial advisors can help you develop a comprehensive plan that addresses your major financial stressors such as retirement, home ownership, children, inheritance, college planning, marriage, divorce, and insurance. They also can provide informed advice when unexpected financial issues arise. They keep current on new financial products and all of the changes in investing, tax laws, and insurance regulations, and other legislation that could affect your financial affairs so you don't have to.

  Learn More: Should You Use a Financial Advisor?
• How much does a financial advisor make?

  According to the U.S. Bureau of Labor Statistics, the mean annual wages for a personal financial advisor in 2021 was $119,960. New York, the District of Columbia, Washington, Massachusetts, and Montana top the locations in the U.S. with the highest mean wages, but the states with the highest concentration of jobs iౠnclude Connecticut, North Carolina, Rhode Island, Illinois, and Massachusetts.  

  Learn More: Making It Big On Wall Street
• Is a financial advisor a fiduciary?

  A fiduciary is a professional held to a fiduciary duty, meaning the person must act in their client's best interest not their own. Fiduciary financial advisors make investment decisions with you in mind and disclose any personal conflicts of interest, while an advisor who isn't a fiduciary may recommend products based on an expected commission or fee. Not all advisors who are members of a professional financial organization, for instance, have a fiduciary duty to clients, but certified financial planners do. It is part of their certification.

  Learn More: 5 Misconceptions About Fiduciaries
• Are there any re𒁏sources available that can prepare financial advisors and their clients for meetings?

  Yes, Investo𒅌pedia offers Financial Advisor Discussion Guides—downloadable PDFs that cover a variety of financial topics. Each guide includes sections like “Why Does This Matter Now?” and “Where to Start,” along with fillable sections for “Questions to Ask Yourself” and “Questions for a Financial Advisor.”

  Learn More: Financial Advisor Discussion Guides