How to Find the Right Financial Advisors for Your Needs
At a certain point in all of our financial journeys, we realize that we could use help from a professional. Whether you’ve been reading about finance since you were a kid or you barely understand the difference between a checking and savings account, it can help to get an outside perspective on your financial life and additional help from someone who spends most of their time learning about financial topics. Plus, the world of personal finance is so vast that no one can be an expert on everything. I have compiled a list of the four different financial advisors you may look to for help with your finances at different stages in your journey as well as several other terms you may come across when you start researching your options.
Financial Therapist / Financial Social Worker
A financial therapist or financial social worker is someone who will look into your past to help you find solutions to deal with your finances in your present. Just like a regular therapist, this type of professional is trained to help you find any deep-seated patterns in your current habits and help you develop the tools you need to deal with any harmful behavior.
This is the type of professional you should seek out if your relationship with money is disordered to the point where it’s having a consistently negative impact on your family, career or other aspects of your life. You might seek out this type of professional if you suspect you may have a gambling or shopping addiction, if something in your past compels you to give away or spend money as a way to be liked or feel worthy, or if you think you may be in a financially abusive situation with a current partner, family member or friend.
Money can be highly emotional and we tend to assign meaning to it beyond just what it can buy us. A financial therapist or social worker can help you create healthy boundaries around those meanings while decoding the past experiences that created them in the first place.
Financial Coach / Financial Trainer
A financial coach is someone who will meet you where you are in your current financial situation and help you build a plan for your future. Their job is to give you objective feedback on your current spending habits, help you design realistic short and long-term goals, give you tangible steps to achieve those goals over time, and then hold you accountable to the plans that you created together.
This type of professional should be well-versed in a number of financial subjects, including debt management, budgeting, retirement planning and investing. That being said, this type of professional does not have the licensing required to create investment or insurance portfolios or give specific tax advice. The real magic that comes with working with this type of professional comes from receiving straightforward guidance and ongoing accountability and support. Because coaches are typically paid a flat fee for their service as opposed to a commission for product sales or a percentage of your investment portfolio, their only financial motivation is to help you keep your net worth growing.
As a Financial Trainer at The Financial Gym, I’m definitely biased. However I believe that this is the type of help 98% of people who look to engage a Financial Advisor are actually looking for. The concept of a Financial Coach is still fairly new and unfortunately is not highly regulated. That means that when you do your Googles for a Financial Coach, you may find an abundance of options without a lot of supporting information to help you understand if this person is the best fit for you.
A good financial coach should want to give you the tools you need to feel confident about your financial decisions as opposed to pushing you to invest in a specific way or buy a narrow set of financial products. You will also want to look for a coach who understands the reality of the world we live in. They should realize that privilege is real and while everyone has to take personal responsibility for their decisions, they also may not be working with the same set of advantages. A good coach should never make you feel shame about your financial decisions or circumstances.
Certified Public Accountant
A certified public accountant or CPA is a licensed and board regulated practitioner who is trained to handle accounting and tax services for businesses and individuals. For individuals, you may find this type of professional preparing taxes and helping with more complicated tax scenarios such as starting or selling a business, buying or selling investment real estate, buying or selling a significant amount of stock or stock options, retirement and inheritance tax issues, and other specialty tax situations. This type of professional will not typically help you create a holistic financial plan, but you may find yourself being referred to a CPA to get complex tax questions answered.
Certified Financial Planner / Financial Advisor
A Certified Financial Planner (CFP) is a Financial Advisor who has been certified by a specific board that requires a standardized level of knowledge and ethics for its members. A Financial Advisor is a professional who has taken a set of tests (series 7 and series 65) to become accredited and legally able to provide investment and specific insurance product advice. It’s like a square and a rectangle. A Financial Advisor doesn’t have to be a CFP, but a CFP will always be a Financial Advisor. The CFP credential is an additional certification that a Financial Advisor can choose to hold as part of their practice. Their credentials give them the ability to create an investment and/or insurance portfolio on behalf of their clients. They can also provide other financial advice around topics such as budgeting, retirement, debt repayment, etc.
Some of these professionals have a “fiduciary standard” status, which means that they’re liable for making decisions in your best financial interest. However, some Financial Advisors do not work under that distinction. (Note, all CFPs are fiduciaries as part of their certification.) This is why you may meet some Financial Advisors who seem more concerned with selling you the investment and insurance products offered by their company whether they’re the best fit for your financial situation or not.
This type of professional should have the ability to, but will not always, offer holistic financial planning services as their expertise (and frankly price point) may be more conducive to working with clients with more foundational financial knowledge or a more complicated financial situation. Finally, because many CFPs are paid a percentage of their clients’ investment portfolios, they will often only work with clients who have a net worth above a specific threshold.
A few other terms you may find when searching for financial help:
- FP&A – Financial Planning and Analysis
- Accredited Asset Management Specialist
- Chartered Retirement Planning Counselor
- CFA – Chartered Financial Analyst
- Chartered Financial Consultant
- Chartered Investment Counselor
- Accredited Financial Counselor
- Certified Personal Finance Counselor
How to choose the best advisor for you
Before you work with financial advisors, spend some time following them on social media to see if they’re a good personality fit. Look at some of the advice they provide to their audience. Do they try to make personal finances feel simpler or super complex? Do they assure you that you can handle your finances on your own or make it seem like you’ll be out of luck without their advice? Do they spend a lot of time talking about a specific type of investment or financial product (e.g., insurance), or do they speak from a more holistic place?
Regardless of where you are in your financial journey, it’s imperative that you get the advice and information you need to help move you to the next level. I’ve heard many potential clients say something along the lines of, “Once I pay off these credit cards, I’ll come work with you.” To that I say, don’t be the person who tries to clean the whole house before the housekeeper comes.
Professionals are out here waiting to help you clean your financial house. Don’t delay your growth because you’re afraid to show someone your messy finances. Hopefully, this guide has helped you understand which type of professional you should be seeking out based on where you are right now. Maybe you’re not quite ready for a CFP, but a Financial Trainer is that perfect person to get you past the debt payoff stage and into the wealth generation stage. Wherever you need to start, just make sure you get started.
Bevin Morgan is a Financial Trainer at The Financial Gym who has paid off over $200K in debt to become debt free. She is a real estate investor and self-proclaimed personal finance nerd. She specializes in helping Black female entrepreneurs and creators gain confidence in their financial futures with a touch of woo woo. She is on a personal mission to help bridge the racial wealth gap in this country. Black families hold less than 10% the average wealth of white families. Instilling financial confidence in Black women is one small step she’s taking to help change that.
Find her at www.bevinmorgan.me or on Instagram, @bevinmorgan.