What Does A Financial Advisor Do And When Should You Get One?
What Does A Financial Advisor Do And When Should You Get One?
Brian Baker, CFA Mon, April 14, 2025 Bankrate
Most people are aware of financial advisors and may even hire one at some point in their lives, but what exactly do financial advisors do? Financial advisors provide advice and guidance on a variety of financial issues you’ll encounter over the course of your life such as investments, retirement planning, insurance and even taxes.
Here’s what else you should know about financial advisors, including the advantages and disadvantages of using one and when you should consider hiring one.
Financial Advisors: What They Do And How They Can Help Manage Your Money
A financial advisor is someone who helps you manage various aspects of your financial life. People most often associate financial advisors with planning for retirement, but they can also be involved in general investment management, budgeting, insurance, taxes, estate planning and more.
Financial advisors charge a fee, often expressed as a percentage of your assets, in return for their services. They can assist you with several different aspects of your financial life, but not all advisors or firms provide the same services.
Here are some of the common areas financial advisors provide guidance on:
Goal planning: One of the first things an advisor typically does is ask clients about their short- and long-term financial goals. A financial plan is then built around achieving those goals while taking into account the unique circumstances of each client.
Budgeting: If you’re just starting out in your financial journey or even if you’re more established, advisors can help you construct an overall budget and identify ways to boost your savings, if necessary.
Investments: Financial advisors also provide advice on your investment portfolio and can assess things such as your overall asset allocation. They can also answer questions and recommend investment products such as mutual funds and ETFs.
Retirement planning: Nearly every financial advisor will be able to assist with retirement planning, which is often the biggest long-term financial goal for most people. They can help you navigate your employer’s 401(k) plan and offer guidance on other choices such as a traditional or Roth IRA.
Taxes: Financial advisors can provide guidance that takes into account current and future tax considerations.
Insurance: Financial advisors can also help you determine whether life insurance or annuity products make sense for you, but be sure to understand whether the advisor will receive a commission on the product they’re selling to you.
Estate planning: Planning for the end of life isn’t easy, but financial advisors may be able to guide you through the estate planning process, which will make it easier on your heirs when that time comes.
Types Of Financial Advisors
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