When you fill out our form, MagnifyMoney will point you toward potential advisors, including robo-advisors, who may be available to work with you.
Our form will ask for a bit of your financial and personal information, including your age, zip code, annual household income and total amount of assets.
Depending on your answers, we may also ask for your full name and contact information to make communication easier. Of course, this is optional to provide.
Once you have provided this information, MagnifyMoney will provide you with a list of the financial advisors on our platform who have shown interest in working with clients like you.
In this age of technology, robo-advisors have risen to become many investors’ go-to when it comes to asset management. Robo-advisors are online investment management systems, often heavily mobile and app-based. They take an automated approach to investing, and most often don’t offer human involvement, instead allowing their algorithms to do the work. Robo-advisors also generally charge lower fees and have lower minimum asset requirements.
Financial advisors, on the other hand, offer a traditional relationship with a professional who personally manages your portfolio. Some may also help you manage other aspects of your finances, too. Financial advisors can offer a higher level of personalization, though you’ll generally face higher costs for that added customization.
Learn more about these two types of advisors.
|Robo Advisor||Financial Advisor|
|Online and mobile only||In-person advisor|
|Lower fees (0%-0.89%)||Typically higher fees (flat fee, hourly or asset-based fees ranging from 0.59% to 1.18%)|
|Low to no minimum balance requirements||Higher minimum investment requirements|
|Automatic asset allocation based on your risk tolerance||Personalized, human-led asset management|
|Model portfolios based on questionnaires||Personalized portfolios with greater input and guidance|
|Account offerings may be limited||Wider range of account offerings depending on goals and preferences|
Although financial advisors are usually local, check out our picks for these financial advisors that operate in most states.
Financial advisors regularly seek to help their clients meet their long-term financial goals, including in the following situations:
Investment advisors provide securities and investment advice to clients, as well as asset management. Registered investment advisors (RIAs) must be licensed by their state and/or the Securities and Exchange Commission (SEC).
Financial planners help you create a comprehensive financial plan at every stage of life. This can include tax preparedness, cash flow management, retirement planning, estate planning, college savings, debt reduction and more. Many financial planners can specialize in one of these areas or more, such as an estate planner.
Wealth managers provide services that are geared toward higher net worth individuals — think millions of dollars in assets. They generally provide services that are more comprehensive in scope, beyond just general investing advice.
Brokers, or registered representatives, buy and sell securities products like bonds, mutual funds and stocks. Stockbrokers work for broker-dealers and must be licensed by the state in which they practice. Stockbrokers must also be registered with the Financial Industry Regulatory Authority (FINRA) and pass FINRA stockbroker exams to practice.
People often assess their financial situation to determine what they want to get out of working with a financial advisor before starting to look for one. Many people consider:
Having a financial advisor located nearby can be convenient for a client. That way, the client and advisor can talk and work together in person. A bank or credit union may have in-house financial advisors, which adds an extra level of convenience.
A robo-advisor, on the other hand, offers automated portfolio management and an online experience. Some robo-advisors include the chance to speak with human advisors as a more premium feature, while others offer it to all levels.
Before working with a financial advisor, many people take a look at their credentials. These can indicate their level of experience and education, as well as their areas of expertise. Though there are numerous certifications an advisor can earn, here are some common certifications financial advisors maintain:
Certified Financial Planners (CFP) are educated and trained in eight areas of financial planning, including taxes, retirement, estates, insurance and risk management. In addition to their initial education and examination, CFPs must complete 30 hours of continuing education every two years. Additionally, CFPs must abide by standards set by the CFP board.
Chartered Financial Analysts (CFA) are certified to provide you with advanced investment analysis and portfolio management. The CFA designation is globally recognized, and CFAs must go through extensive education and training that continues throughout their career. CFAs are also bound to fiduciary duty, which means they must act in their clients’ best interests.
Chartered Financial Consultants (ChFC) cover everything from tax planning to wealth management, advising based on specific needs, risk management and more. To become a ChFC, an advisor must complete the eight courses and pass an exam issued by The American College of Financial Services. The ChFC’s Professional Pledge includes a commitment to fiduciary duty.
Certified Public Accountants (CPAs) are best known for their tax services like accounting and auditing, but they can also provide personal financial planning, technology consulting and business valuation services.
Retirement Income Certified Professionals (RICP) are specialized financial advisors who can help you build a retirement plan and ensure you meet your financial goals. The RICP credential requires the completion of three educational courses and an exam.
Certified Private Wealth Advisors® (CPWAs®) serve high net worth individuals, (defined by the SEC as those with at least $750,000 in assets under management or a net worth of at least $1.5 million). CPWAs must complete a monthslong certified education program and pass an examination at the end of the course. The certification is issued by the Investments & Wealth Institute. CPWAs must commit to following the Institute’s Code of Professional Responsibility, which requires CPWAs to act in the best interest of the client.
Not all financial advisors make money in the same way. While financial advisors will typically earn money from the fees their clients pay — whether through asset-based, hourly or fixed fees — some advisors may bring in money through other avenues, such as selling financial products. In fact, some advisors exclusively earn money from commissions.
Here are the three main financial advisor fee structures and what they mean:
A financial advisor generally charges an annual fee of 0.59% to 1.18% of a client’s total assets under management, although the exact cost will depend on the advisor, the firm, the client’s asset balance and the advisor’s fee structure.
While this may not seem like a lot, it can take a chunk out of a person’s savings, especially for lower-level investors. For example, someone who has $250,000 under management is going to end up paying their financial advisor $5,000 in a single year at a 2% rate.
A financial advisor may charge other fees, such as performance-based fees (for when the advisor hits a benchmark); flat fees for extra or separate services or products; and investment-related costs like trading commissions.