This is a broad term for a professional who helps manage your money. You pay the advisor, and in exchange, they help with any number of money-related tasks. A financial advisor might help manage investments, broker the sale and purchase of stocks and funds, or create a comprehensive estate and tax plan. If the advisor is working with the public, they must hold a Series 65 license. In addition to that license, there are many other financial advisor credentials the advisor might hold, depending upon the services that are provided.
You should also request a copy of a financial advisor’s Form ADV and Form CRS, which is paperwork the SEC requires advisory firms to file. This will provide information about an advisor’s business, pay structure, educational background, potential conflicts of interest and disciplinary history. That information is also available online through the SEC’s Investment Advisor Public Disclosure (IAPD) tool. You should also request a performance record and list of client references to contact.
Investment advisors who work with retirement accounts are now held to the Department of Labor (DOL) fiduciary standard. These advisors must disclose all fees and conflicts of interest. They cannot recommend products that represent a conflict within retirement accounts. In other accounts, RIAs can recommend products that represent a conflict as long as they disclose the conflict first.