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If simply reading these questions makes you feel uneasy, you’re not alone. There are few topics that elicit such a quick and powerful reaction as discussing our personal finances.
At Wealthtender, we believe personal finance is an emotional and human subject. We enjoy using online tools and apps that help automate and simplify our finances, but when it comes to financial education, guidance and advice, we believe there is no substitute for human wisdom and life experience.
We coined the term wealthtender to describe a person who is a resource you can trust for help with money matters. This includes a broad range of financial professionals and semi-professionals who offer their insights and services in person and online.
Our mission at Wealthtender is to help people discover the most trusted and authentic financial professionals no matter their income or stage of life. We believe everyone deserves a wealthtender and we want to help you find yours.
When people think of financial professionals, a local financial advisor most often comes to mind. And with approximately 300,000 financial advisors in the U.S., the role they play helping millions of Americans invest and improve their financial health is considerable.
Beyond traditional financial advisors, there are other types of financial professionals to consider as well, including financial coaches, counselors and therapists. And today, many personal finance blogs, podcasts, video channels and online courses created by respected members of the personal finance community have become integral sources of education and advice, primarily built upon the life experience of their owners.
What has also changed is the way people work with financial professionals. If you’re ordering a pizza, it’s important to pick a place that’s close to home. But when it comes to working with a financial professional, it’s more important to choose someone who understands your unique needs and can offer you personalized insights and service than to hire someone who happens to office nearby. Many financial professionals offer their services to people across the country while maintaining the very important human and personal touch through video calls, live chats and help on demand.
Then there’s the question of cost and timing. Can I afford to hire a financial professional? And when should I hire a professional? Fortunately, there are more pricing options today than ever before with a range of costs for every budget, including free help available for the people who need it.
We prepared this guide to help you learn more about your options for choosing a financial professional, including the services they provide, when you might need one, how much they cost and how to find the right financial professionals for you.
In the coming weeks, we’ll be announcing a new service to help you discover the best financial professionals for you right here at wealthtender.com. Would you like to be among the first to know when we launch the service? Click here to let us know and we’ll send you an email when we launch.
It can be confusing and overwhelming for most people (including those in the finance industry!) to keep track of the dozens of titles, designations and certifications that exist among financial professionals. Many of these professionals do roughly the same thing, although their titles and credentials may differ. Some charge upfront for their services or by the hour, others work on commission or take a percentage fee, and a few can be accessed for free.
In the personal finance space, there are a lot of blurred lines, and some professionals develop a complex skill set, take on a number of roles, and provide a broad range of services. You’re unlikely to find a money coach who doesn’t at least refer to mindset issues alongside financial ones, and many financial advisors will help you think about future financial planning as well as taking immediate action.
To try and simplify things, we’ve organized this guide into five broad categories that each offer a more in-depth discussion of the different titles and designations often associated with the category. We also created a table following this article as a resource you can reference to help your understanding as well. (It should be noted that this guide is not exhaustive as we don’t discuss accountants, insurance agents, lawyers and other professionals who may offer financial services.)
Read on to learn more about these different types of financial professionals you might need to consult, titles they may use, what they do, and exactly when you should consider hiring them.
Financial advisors are also commonly known as investment advisors, financial consultants, or investment consultants. Common professional designations include Registered Investment Adviser (RIA), Chartered Financial Analyst (CFA), Certified Fund Specialist (CFS), and Certified Investment Management Analyst (CIMA). You may also see them referred to as either financial advisors or advisers. This is not a spelling error. It’s due to the fact that some professionals still use the original old English spelling used in the Investment Advisers Act of 1940, as shown in the chart below and explained further in this article written by Michael Kitces at Nerd’s Eye View.
There is often crossover in the services offered by financial advisors and financial planners (as we explain further below) making it hard to ascertain exactly how many there are in the US. But according to Kitces.com citing research from Cerulli Associates, the number has been estimated at a little over 300,000 (though as Michael Kitces points out in his article, this number may be overstated).
Financial advisors in the US are commonly regulated by the US Financial Industry Regulatory Authority (FINRA) and those with more than $100 million in regulatory assets under management must also be registered with the US Securities and Exchange Commission (SEC), as a Registered Investment Adviser (RIA).
A financial planner is often known as a Certified Financial Planner (CFP). CFP.net claims there are now more than 80,000 Certified Financial Planners in the United States. You will find there is a lot of crossover between financial advisors and financial planners, with some professionals offering both types of assistance. Financial planners may be registered with the National Association of Personal Finance Advisors (NAPFA) and/or US Financial Industry Regulatory Authority (FINRA). Financial planners must also be registered with the US Securities and Exchange Commission (SEC) or the appropriate state securities regulator.
It is also important to note that the Securities and Exchange Commission (SEC) established a new regulation known as Regulation Best Interest (Reg BI) effective June 30, 2020. This rule establishes a standard of conduct for financial advisors affiliated with broker-dealers to act in the best interest of their clients. While it may sound odd that this hasn’t always been the case, the previous suitability standard only required that a product recommendation be suitable based on a client’s personal situation, not necessarily determined by the financial advisor to be the best option for a client.
The services offered today by most financial advisors have evolved from selling financial products and services for a commission to receiving a percentage fee on the assets they manage as discussed further below. While financial advisors continue to spend significant time helping clients select and understand investment products like mutual funds and exchange traded funds (ETFs), their role increasingly focuses on understanding their clients’ complete financial picture.
Good financial advisors listen to learn your investment goals and how comfortable you are with risk, take your personal situation into account, and advise you on the best investment options, products and services offered by their firm based on your financial resources, needs and requirements.
Much like a financial advisor, a financial planner will help you make investment decisions, but, as the name implies, your financial planner will generally help you take a longer term view of finances and look at the bigger picture. They will help you plan your entire life, from a financial perspective, advising you on things such as investing your wealth, minimizing tax liability, estate planning, insurance, and planning for long term goals such as saving for your kids’ college education, or planning for retirement.
You should strongly consider hiring a financial advisor if you have a significant amount of money available for saving or investing. This could occur after years of making annual contributions to a retirement plan like a 401(k) through your employer, or suddenly if you receive a large inheritance or sell your house for a large profit.
But even if you don’t have a lot of money saved, many financial advisors and planners provide reasonable pricing options and valuable services you should consider, especially if you’re facing a significant life event. For example, if you’re starting a new job, getting married, starting a family, getting divorced, lost your job, starting or selling a business or approaching retirement age, working with a trusted financial advisor or planner may prove worthwhile.
Some financial advisors charge a client fee, which means you pay them directly, either an hourly fee or, more commonly, a small percentage of the value of the assets they are managing for you known as an advisory fee that is deducted from your account. Generally speaking, you can expect to pay an advisory fee ranging from around 1% to 1.5% of the value of your assets under management each year. It is worth noting that this fee does not include the cost of investment products like mutual funds or ETFs that may be held in your account.
Other financial advisors are compensated by the companies whose products they sell, based on the sales they make, and some use a mixed model, charging lower fees, but also taking a commission on sales made. Before you hire an advisor, you should be sure you understand how they are paid and they should be comfortable telling you when you ask the question.
Financial planners are often paid by the hour, although some work for a monthly retainer. Depending on your circumstances, you may also pay a one-off fee for a consultation on a specific issue, or to have a comprehensive financial plan put together for you. This may be necessary, for example, if you’ve just sold a business for a large sum and want your future finances planned out in detail.
According to NerdWallet, you can expect to pay hourly fees in the region of $200 to $400, and around $1,000 to $3,000 for creation of a financial plan. For ongoing financial planning you will generally be charged an annual retainer of $2,000 to $7,500 (or $167 to $625 per month), depending on your needs and your financial situation. Financial planning is a complex process with a complex fee structure, so make sure you know exactly what fees you will be charged and when.
A good place to start is the National Association of Personal Finance Advisors (NAPFA.) Financial advisors and financial planners registered with NAPFA are legally bound to act as fiduciaries, and must always put their clients’ interests first. This means you will always be advised based on which is the best product for you, and not based on which provides the highest commission for the advisor.
If you go for a commission based advisor who is not acting as a fiduciary, then they only have to abide by the suitability standard until the new Reg BI rule takes effect on June 30, 2020 as discussed above. This means the advisor’s recommendations must be appropriate for your needs (suitable), but does not rule out advisors using self-interest when deciding what to recommend.
There are also a few networks that list financial advisors and planners, including Garrett Planning Network and the XY Planning Network. Financial Advisors who are part of the XY Planning Network have no minimum asset requirements and all offer their services online so you’re not limited by location.
You should always check the credentials and registration of any financial advisor or planner you’re planning to work with, and you can use free tools from FINRA and the SEC to do so. BrokerCheck is a free tool offered by FINRA to research the background and experience of financial advisors associated with securities firms. For a more comprehensive search, you can use the SEC’s Investment Adviser Public Disclosure database that includes results from BrokerCheck.
Since there is a lot of crossover in what a financial advisor and a financial planner will do, make sure any professional you engage knows exactly what you are looking for before entering a long-term arrangement.
In the coming weeks, we’ll be announcing a new service to help you discover the best financial advisors and planners for you right here at wealthtender.com. Would you like to be among the first to know when we launch the service? Click here to let us know and we’ll send you an email when we launch.
A financial coach may also go by the title wealth coach, money coach, personal finance coach, financial life coach and often hold certifications such as Certified Personal Finance Consultant (CPFC), Certified Money Coach (CMC), Certified Professional Financial Coach (CPF Coach) or Certified Financial Planner (CFP). Unlike financial advisors and planners, financial coaches are not usually registered or regulated by an outside authority, as coaching in general is not as tightly controlled as most financial services. This means it is impossible to say how many money coaches there are in the US, but it has been estimated that there are around 17,500 personal coaches across the US, specializing in different areas.
If a financial coach is certified, it means they have some kind of qualification. A CMC, for example, has usually trained with the Money Coaching Institute. However, some financial coaches may have a general coaching certification, which focuses on coaching skills, and is not necessarily a finance specific qualification.
As you would expect, they coach you to manage your own personal finances better. They help you do things like set financial goals, improve spending and saving habits, develop a budget, make a plan to get out of debt, improve your mindset around money, and make sound financial decisions. They may also refer you to other financial professionals or recommend digital and other tools related to finances. Financial coaches do not generally sell you financial products or give specific investment advice.
You may want to hire a coach if you feel you need to get your finances in order, and learn to manage them better. You’re probably not looking for specific investment advice, but rather to develop a skill set that will let you excel in the area of personal finance and money management. You may also feel that you need the accountability of checking in with a coach regularly, or that you need to change your mindset when it comes to money and wealth.
Financial coaches usually charge by the hour, or sometimes put together a package, such as six one-hour coaching calls in six months, with email support in between. The Financial Educators Council states that hourly rates for financial coaches tend to vary between $75 and $600, with an average of $257 per hour. When it comes to annual coaching programs, you may pay anything from a few hundred dollars, to almost $6,000. Many coaches will offer you a free initial consultation or ‘discovery call’ to see if you are a good fit for each other.
As money coaches are unregulated, there is no central independent organization to go to in order to find one. For this reason, personal recommendations, testimonials and reviews are important, as is a preliminary meeting so you can ascertain whether a coach is right for you. The Money Coaching Institute maintains a directory of Certified Money Coaches across the globe, which may be a useful starting point. You can also search online for financial coaches near you, but remember many coaches will work remotely too, coaching you by phone or video call, so if a friend across the country has a great recommendation, don’t rule it out.
In the coming weeks, we’ll be announcing a new service to help you discover the best financial coaches for you right here at wealthtender.com. Would you like to be among the first to know when we launch the service? Click here to let us know and we’ll send you an email when we launch.
Financial therapists may also be referred to as money therapists, or financial wellness therapists. This is a fairly new niche in the financial services industry, but has been growing for a few years now. As of 2019, the Financial Therapy Association (FTA) is offering training and certification, leading to the designation Certified Financial Therapist-I™ (CFT-I™). This is a professional certification offered by the FTA, covering financial and mental health professionals. In order to apply for this designation, financial therapists must adhere to the FTA Standards of Practice and Code of Ethics. As a relatively new profession, there are not many financial therapists around. The FTA lists around 50 members, although there may be many other therapists offering financial therapy, who are not listed with the FTA.
Financial therapists aim to help people improve their finances by changing the way they think and feel about money. This can then impact their behaviors when it comes to earning, saving, spending and managing money. It has long been acknowledged that the way people manage money is strongly associated with emotions and attitudes, rather than just financial knowledge, and financial therapy uses evidence-based practices and interventions to improve both financial and emotional well-being.
Good financial therapists help clients develop healthy attitudes and boundaries around money, which can in turn help with issues such as overspending, financial enabling, and financial dependence. While financial therapists may sometimes offer insights on specific strategies or investments, they are primarily focused on mindset and developing a sense of control and well-being around personal finances.
You may need a financial therapist if your attitude towards finances is causing you stress and impacting your well-being. It is often hard to distinguish between situations where it’s your attitude that is the problem, or your finances themselves. As examples, financial therapists can help you if money is causing major issues between you and a partner or family member, if you have limiting beliefs around money that prevent you from becoming financially stable, or if you have an attitude towards money that results in inappropriate spending patterns (whether that’s overspending, or extreme frugality).
Financial therapists tend to charge by the hour, as other types of therapists do. Unsurprisingly, they also charge roughly the same hourly rates as any other therapist, which can vary greatly, but is never cheap. According to online directory Good Therapy, most therapists in the USA charge anywhere from $65 to $250 an hour. Prices will usually depend on various factors, such as the therapist’s training, reputation, and location.
As financial therapy falls under the broad concept of mental health, you may find your health insurance at least partially covers it, which certainly won’t be the case with other financial services. However, there may be several hoops to jump through, including things like getting a mental health diagnosis or a referral for treatment from another professional. However, New York based therapists TriBeCa Therapy, who offer financial therapy among their services, claim that many patients receive at least partial reimbursement from their health insurance providers if they have out-of-network coverage.
The FTA maintains a list of financial therapists across the USA, with details of their qualifications, number of years in practice, fee structure, and practice approach. They also specify whether they offer therapy at a distance (usually through Skype, Zoom, or similar). They are bound by a code of ethics and, if they offer any specific financial advice, are obliged to act as fiduciaries, always putting their clients’ interests first.
Remember that many therapists may include finances among the things they are willing and able to help you with. This is especially true of couples therapists, given how commonly money becomes an issue of conflict between partners. However not all therapists have a financial background, or a thorough understanding of the emotional aspect of dealing with finances, so finding a specialist financial therapist can be worth the effort.
Financial counselors go by a few other titles including, perhaps confusingly, debt counselors and credit counselors (as they help you reduce your debt and improve your credit). You may also hear a financial counselor referred to as a Certified Consumer Debt Specialist (CCDS). This is a professional certification held by some financial counselors, awarded by the Center for Financial Certifications (Fincert).
Financial counselors generally work within agencies which may be accredited by the National Foundation for Credit Counselling (NFCC) or the Financial Counseling Association of America (FCAA). The NFCC has approved 57 non-profit agencies across the US, but with so many organizations offering both non-profit services and for-profit counseling, it’s hard to estimate how many credit counselors there are working across the US, in various capacities.
As in other areas of life, a counselor tends to help you with something you are struggling with. You might hire a coach to help improve your finances (even if there’s nothing drastically wrong with them) but you will usually hire a counselor to help you put right something that has gone wrong. Financial counselors typically help people get debt under control and improve their credit score. They will help you put together a plan to pay off debt, which might include better budgeting, refinancing, or debt consolidation. Some counselors will help you set up a debt management plan, and act as an intermediary between you and your creditors.
It’s worth considering a financial counselor if you have financial problems that you can’t solve yourself, such as out of control debt or a very poor credit score. Even then, you only need counseling if you don’t know how to get back on track yourself. People generally seek financial counseling when something goes wrong that will seriously impact their finances, such as unemployment, divorce or a serious health issue. They may also seek help if credit card and other consumer debt has slowly grown to a level they can no longer manage.
Understandably you won’t want to spend a lot of money on counseling if you’re in debt, but you may not have to. Various non-profits, credit unions and religious organizations provide debt counselling for free to people in need, so tell the agency if you are in a position where you need help but simply can’t afford to pay for it, which will usually be the case if you’re seeking debt counseling. If you don’t qualify for free counseling, you will find that many non-profit agencies are very affordable. At the very least, you may find you can get a free initial consultation.
You will, however, have to pay a fee for setting up a debt management plan, though this can be very reasonable. Credit agency, Green Path, for example, currently charges $50 to set up a debt management plan, and $36 a month for ongoing management of it. Depending on how much debt you have, you may find you save a lot more than that each month by the time the agency has negotiated your repayments and helped you consolidate your debts. Fees for credit counseling can vary greatly, so shop around and ask your potential financial counselor to let you know in advance exactly how much you’ll be charged.
It’s always a good idea to start with a non-profit credit counseling agency, and see if you can get help without paying a fee. Look for an agency that is accredited by the National Foundation for Credit Counselling (NFCC)or the Financial Counseling Association of America (FCAA). You may prefer a local agency where you can talk to someone face-to-face, but many agencies offer phone counseling, which can be just as effective, and very convenient.
In the coming weeks, we’ll be announcing a new service to help you discover the best financial counselors for you right here at wealthtender.com. Would you like to be among the first to know when we launch the service? Click here to let us know and we’ll send you an email when we launch.
A growing area of importance for people seeking help with personal finances comes from blogs, podcasts, online courses and other resources (e.g. YouTube video channels) offered by financial professionals and semi-professionals. While many people in this area may have a background or qualification in finance or a related field, there is no requirement regarding this, and many people in the personal finance community simply write from their own experience.
Members of the personal finance community offer education, insights and guidance regarding common money matters, such as overcoming financial challenges, paying off debt, managing money effectively, saving for retirement, or building wealth. Often they write, speak or teach based on their own personal experience, backed up with evidence from other sources and opinions they have formed throughout their lives and careers.
There are many blogs, podcasts and courses that focus on a particular topic like getting out of debt or investing, while others are oriented to a demographic niche (e.g. recent graduates, active investors or retirees). While many blogs prominently feature the writing of their owner, podcasts usually include interviews with a diverse range of people offering varied perspectives.
Most of us can benefit from learning more about personal finance. It isn’t often taught in school, therefore many of us will find it helpful to read, listen and tune in to what members of the personal finance community have to say to better educate ourselves in the principles of good money management.
You should be aware, however, that the personal finance community is generally writing or speaking to a broad audience. While some may chat with their audience individually in forums, you should usually consult one of the other financial professionals listed above for personalized advice. With this said, an increasing number of financial advisors, planners, coaches and other professionals also have blogs, podcasts and courses, so make sure you do your homework on who’s behind your favorite blog, podcast or course as they may be able to offer individualized services.
The good news is that you can access most personal finance blogs and podcasts for free. Online courses may offer a free preview, but usually charge users for completing the course with costs that range from a few to several hundred dollars.
Be aware that owners of personal finance blogs and podcasts primarily make money from advertising or recommending specific services and tools to readers. A good personal finance website will clearly disclose how they make money and if they are compensated for recommending financial products and services.
There are many publications, sites and blogs on personal finance, and once you have found a few you like, it is worth subscribing so you don’t miss future articles on the topics that are of interest to you. If you have a specific question, or issue you’re researching, a simple online search will probably bring up several articles about any given personal finance topic.
In the coming weeks, we’ll be announcing a new service to help you discover the best financial blogs, podcasts, video channels and online courses for you right here at wealthtender.com. Would you like to be among the first to know when we launch the service? Click here to let us know and we’ll send you an email when we launch.
Money is a complex and emotional topic, and you don’t have to always face difficult decisions about it on your own. You may not need to consult all of the above professionals, even over the course of a lifetime, and certainly not all at the same time. However, you may find that knowing what type of help is out there, and how to access it, can help you have confidence and peace of mind around your personal finances.
|Common Title||Financial Advisor||Financial Coach||Financial Counselor||Financial Therapist||Personal Finance Community|
|Alternative Titles and Designations||Financial Adviser, Financial Planner, Investment Advisor, Financial Consultant, Investment Consultant, Registered Investment Advisor, Certified Financial Planner, Chartered Financial Analyst||Money Coach,Wealth coach, Personal finance coach, Financial life coach, Certified Money Coach||Debt counselor, Credit counselor, Certified Consumer Debt Specialist||Money therapist, Financial wellness therapist||Finance blogger, Podcaster, Online Course Creator, YouTuber, Finance Writer, Finance Author|
|Regulated by||FINRA, SEC||Not regulated||Generally work within agencies accredited by NFCC or FCAA||Not regulated||Not regulated|
|Common designations held||RIA, CFA, CFP, CFS, CIMA||CPFC, CMC, CFP||CCDS||CFT-I||Varies, often none|
|Estimated # of people in U.S. with this title||300,000+||Thousands||Thousands||50+||Thousands|
|Primary Audience Served||Individuals and couples with assets to save or invest, with needs ranging from simple to complex||Individuals and couples who want to improve their finances.||Lower income individuals and couples||Individuals and couples under intense stress impacting their well-being||Anyone who is interested in personal finance.|
|Primary Service Offered||Investment advice; Advice on ‘big picture’ financial issues and long term planning.||Personal coaching on money management.||Advice on getting out of debt & improving credit.||Counseling to provide a sense of control and well-being around money||General, non- customized advice on personal finance.|
|Other Services Commonly Offered||Advice on related services such as insurance, tax planning, estate planning, college savings.||May recommend tools, apps or other professionals as needed.||Setting up a debt management plan.||May offer insights on specific strategies or investments||May recommend tools, apps and further resources.|
|How do they generally make money?||Commissions and/or fees based on an hourly rate or a percentage of assets under management. Planners more often paid by the hour, charge a retainer fee or a fee for one-time plan creation||Offer pre-paid coaching packages, or consultations at an hourly rate.||Usually employed by an agency to provide counseling for free or for a set fee.||Generally charge by the hour||Paid by owners of publications & websites. May make money from advertising or recommending products and services.|
|How long is a typical engagement?||Varies, but usually long term, often for a lifetime||Up to a year, depending on the packages offered.||Varies. Sometimes short-term, until the debt is under control. Longer if there is a debt management plan in place.||Varies. Sometimes short-term if an issue is quickly resolved. Longer if issues are complex.||Readers may read one article, or subscribe to a particular publication for as long as they want.|
|How much do they cost?||Costs can vary significantly. Typically advisors charge 1% – 1.5% of the value of assets under management.||Costs vary significantly.From around $300 – $6000 for annual coaching packages.||Usually free, through a non-profit agency. A typical fee for a debt management plan is around $50 to set up and then $34 a month.||Varies, but estimated between $65 to $250 an hour ,depending upon training, reputation and location||The insights from writers are usually free to readers, with the cost absorbed by website owners who make money from advertisers.|
|If they are willing to charge by the hour, what is an estimated hourly rate?||$200 – $400||$75 – $600 (average $257)||Usually free||$65-$250||Not applicable|
Disclaimer: The information in this article is not intended to encourage any lifestyle changes without careful consideration and consultation with a qualified professional. This article is for reference purposes only, is generic in nature, is not intended as individual advice and is not financial or legal advice.