What do financial advisors do?

June 17, 2023
for People

In today's complex financial landscape, many individuals find themselves seeking professional guidance to navigate the intricacies of managing their money. This is where financial advisors come into the picture. A financial advisor is a skilled professional who provides personalized guidance and expertise in various aspects of personal finance. Whether it's planning for retirement, optimizing investments, or strategizing for tax efficiency, a financial advisor plays a crucial role in helping individuals make informed decisions and achieve their financial goals. In this article, we will delve into the world of financial advisors, exploring their role, services, qualifications, and the importance of having one by your side. So, let's uncover the question on many people's minds: What do financial advisors do?

What Do Financial Advisors Do?

Financial advisors are professionals who offer expert advice and guidance on various aspects of personal finance. They help individuals and families make sound financial decisions, develop comprehensive financial plans, and navigate the complexities of the financial landscape. Here's a closer look at the key responsibilities and services provided by financial advisors:

Assessing Financial Goals and Objectives

Financial advisors begin by understanding your financial goals and objectives. Whether you're aiming for a comfortable retirement, saving for your child's education, or buying a new home, they will evaluate your current financial situation and help you set realistic and achievable goals.

Creating Personalized Financial Plans

Once your goals are established, financial advisors develop personalized financial plans tailored to your unique circumstances. These plans outline the steps needed to achieve your goals, taking into account factors such as your income, expenses, investments, and risk tolerance.

Investment Management

Financial advisors help you build and manage a diversified investment portfolio based on your risk tolerance, time horizon, and financial goals. They analyze market trends, assess investment options, and make recommendations to optimize your portfolio's performance.

Retirement Planning

Planning for retirement is a crucial aspect of financial management. Financial advisors guide you through the complexities of retirement planning, helping you determine how much you need to save, choose appropriate retirement accounts, and develop strategies for a financially secure retirement.

Tax Planning

Taxes can significantly impact your financial well-being. Financial advisors provide tax planning services, helping you minimize your tax liability through strategic decisions and optimizing tax-efficient investment strategies.

Insurance and Risk Management

Protecting yourself and your loved ones from financial risks is essential. Financial advisors assess your insurance needs and recommend appropriate coverage options, such as life insurance, health insurance, disability insurance, and long-term care insurance.

Estate Planning

Estate planning involves managing and distributing your assets according to your wishes. Financial advisors work closely with estate planning attorneys to develop strategies for minimizing estate taxes, creating trusts, and ensuring a smooth transfer of wealth to future generations.

Regular Portfolio Reviews and Adjustments

Financial advisors regularly review your investment portfolio to ensure it remains aligned with your financial goals and risk tolerance. They make adjustments as needed, taking into account changes in the market, your life circumstances, and your evolving financial objectives. Read our full guide on what to expect from a financial advisor in the first 90 days.

Financial Education and Guidance

A crucial aspect of a financial advisor's role is to educate and empower you to make informed financial decisions. They explain complex financial concepts, answer your questions, and provide guidance throughout your financial journey.

Collaboration with Other Professionals

Financial advisors often collaborate with other professionals, such as accountants and attorneys, to provide comprehensive services to their clients. This interdisciplinary approach ensures that all aspects of a client's financial situation are considered and addressed in a holistic manner.

  1. Accountants: Financial advisors work closely with accountants to gain insights into their clients' tax situations and develop tax-efficient investment strategies. Accountants can also provide valuable information on clients' income, expenses, and cash flow, which can be used by financial advisors to create realistic budgets and savings plans.
  2. Attorneys: Collaboration with attorneys is essential for financial advisors when dealing with estate planning and legal matters related to their clients' finances. Attorneys can help draft wills, trusts, and other legal documents necessary for the proper transfer of wealth or protection of assets. They may also offer advice on issues such as business formation or contract negotiation, which can impact a client's overall financial health.
  3. Insurance Agents: Financial advisors may consult with insurance agents to ensure that their clients have adequate coverage for various risks they might face. Insurance agents can provide expert advice on the types of policies available and help determine the appropriate level of coverage based on each client’s unique needs.
  4. Real Estate Professionals: When it comes to property investments or home purchases, financial advisors may collaborate with real estate professionals who possess in-depth knowledge of local markets and trends. These experts can assist in identifying suitable properties that align with a client's investment goals or housing needs.

By working together with these professionals, financial advisors are better equipped to address the complexities of their clients' financial lives while providing well-rounded solutions that consider every facet of their unique circumstances.

FAQs about Financial Advisors

1. What qualifications should I look for in a financial advisor?

When choosing a financial advisor, look for qualifications such as Certified Financial Planner (CFP) certification, relevant experience, and a strong track record. It's also essential to ensure they are registered with the appropriate regulatory bodies.

2. How do financial advisors charge for their services?

Financial advisors typically charge fees based on a percentage of the assets they manage (known as assets under management or AUM), hourly rates, or fixed fees. Make sure to clarify their fee structure and understand any potential conflicts of interest.

3. How often should I meet with my financial advisor?

The frequency of meetings with your financial advisor depends on your specific needs and preferences. However, it's generally recommended to have regular check-ins to review your financial plan, monitor progress, and make adjustments as necessary.

4. Can a financial advisor help me if I have limited funds to invest?

Absolutely! Financial advisors work with clients across various financial situations. They can help you make the most of your available funds, develop a savings plan, and explore investment options that align with your budget and goals.

5. Are financial advisors only for wealthy individuals?

No, financial advisors are not exclusive to the wealthy. They provide valuable services to individuals from all income brackets. Financial advisors can assist you in optimizing your finances, regardless of your current wealth level.

6. How do I find a reputable financial advisor?

To find a financial advisor, search the AdvisorFinder marketplace of financial advisors. Additionally, conduct thorough research and interview potential advisors to assess their expertise and compatibility with your needs. Each AdvisorFinder profile lists an advisors areas of expertise, the services they provide, and more! Don't forget to ask a financial advisor these questions before hiring them!


Navigating the intricacies of personal finance can be challenging, but with the guidance of a financial advisor, you can gain clarity and confidence in your financial decisions. From creating personalized financial plans to managing investments, retirement planning, and more, financial advisors offer a comprehensive range of services to help you achieve your financial goals. By partnering with an advisor, you can enhance your financial well-being and secure a brighter future.

Remember, choosing the right financial advisor is crucial, so take the time to research and find an advisor who aligns with your goals and values. With their expertise and guidance, you can embark on a path towards financial success. If you want more help finding an advisor, check out our resources on how to choose an advisor here.